The Department of Education and GAO conducted a study of the feasibility of using alternative financial instruments for determining lender yields on student loans. Chapter one of the report provides an overview of federal student loan programs and their participants. Chapters two and three contain the analyses of the historical liquidity of the market for four types of financial instruments. Chapter four analyzes recent changes in the liquidity of the market for each financial instrument in a balanced federal budget and low interest rate environments, and projections of future liquidity assuming the federal budget remains in balance. Finally, Chapter five presents GAO's and Education's analyses of the remaining three issues enumerated in the Higher Education Act Amendments of 1998 and addresses the question of any possible risks or benefits to the student loan programs and to student borrowers.
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