Department of Education: Information on Consolidation Opportunities and Student Aid

Pursuant to a congressional request, GAO discussed federally supported education programs, focusing on: (1) potential opportunities to consolidate overlapping programs; (2) potential cost savings associated with the proposed direct student loan program; and (3) the Department of Education's efforts to strengthen its procedures for determining which schools participate in federal student financial aid programs. GAO noted that: (1) the Department of Education administers 244 education programs with a fiscal year (FY) 1995 budget of $33 billion, while other federal agencies administer an additional 308 education programs with a total FY 1995 budget of $37 billion; (2) opportunities exist to eliminate or consolidate 187 education programs, although many factors need to be considered to determine how to achieve maximum efficiency from consolidation; (3) the Department of Education has projected cost savings of $12 billion, which may overstate the savings associated with direct lending reform; and (4) although the Department of Education has established new review processes and training programs to strengthen its "gatekeeping" practices, it is too soon to determine their effectiveness.