Report to the Secretary, HEW, on the National Direct Student Loan Delinquency Rate

HRD-77-17: Published: Nov 5, 1976. Publicly Released: Nov 5, 1976.

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The method used by the Office of Education (OE) to compute the loan delinquency rate under the National Direct Student Loan (NDSL) program is discussed, and an alternative computation is suggested. A loan is considered overdue when a scheduled payment has not been made for more than 120 days. The school that made the loan is then required to pursue repayment. The delinquency rate is the percentage obtained by dividing the delinquent amount by the total amount scheduled for collection as of the same date. The base rate is the total amount due and collectable. The OE method does not include the entire principal amount outstanding on already delinquent accounts; it includes only the amounts overdue.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: A better method for computing the NSDL delinquency rate would be achieved by using, as a base, the total amount loaned that is in repayment status. This method would exclude those loans that have been repaid or cancelled. It would recognize partial amounts paid or cancelled on loans that are in repayment status. It would consider the entire principal amount outstanding on delinquent accounts rather than past-due amounts only.

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