Student Loans:

Potential Effects of Raising Statutory Audit Threshold

HEHS-97-111R: Published: May 20, 1997. Publicly Released: May 20, 1997.

Additional Materials:


Carlotta C. Joyner
(202) 512-3000


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information on the potential effects of raising the statutory audit threshold for the Federal Family Education Loan Program (FFELP) to lenders with loan portfolios that exceed $10 million, focusing on: (1) the number of lenders with loan portfolios between $5 million and $10 million, and the total loan volume in these lenders' portfolios; and (2) the number, types, monetary impact, and disposition of audit findings reported to the Department of Education by lenders with loan portfolios in that range.

GAO noted that: (1) if the loan volume audit exemption was extended to lenders with loan portfolios between $5 million and $10 million, relatively few of the more than 5,700 lenders participating in FFELP would be affected; (2) in fiscal year (FY) 1995, 193 FFELP lenders (about 3 percent) had loan portfolios between $5 million and $10 million; (3) these lenders held less than 2 percent of the total outstanding FFELP loan volume; (4) if the audit threshold had been $10 million for FY 1995, the audit requirement would have applied to a total of about 9 percent of FFELP lenders, lenders that collectively held about 96 percent of outstanding FFELP loan volume in FY 1995; (5) 16 of the 193 lenders with loan portfolios between $5 million and $10 million submitted audit reports that contained findings requiring corrective action; (6) lenders with portfolios of this size do not have to submit audit reports to the Department of Education unless they contain these kinds of findings; (7) the 16 audit reports contained 31 findings covering such areas as missing documents in loan files, incorrect billing calculations, and improper classifications of loans; (8) three reports had findings with a monetary impact; (9) collectively, the Department owed lenders $8,751; and (10) as of January 1997, all but 1 of the 16 lenders had taken corrective action.

Sep 10, 2020

Sep 9, 2020

Aug 25, 2020

Aug 6, 2020

Jun 17, 2020

Jun 10, 2020

Jun 8, 2020

May 21, 2020

Mar 31, 2020

Looking for more? Browse all our products here