Defaulted Student Loans: Private Lender Collection Efforts Often Inadequate
HRD-87-48
Published: Aug 20, 1987. Publicly Released: Aug 20, 1987.
Skip to Highlights
Highlights
GAO evaluated the Department of Education's and guaranty agencies' policies and procedures in paying default claims under the Guaranteed Student Loan Program to determine whether they adequately protected the federal government's financial interest and minimized unnecessary insurance costs.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Education | The Secretary of Education should develop and implement a process to systematically review and approve guaranty agencies': (1) standards for collecting loans and filing claims; and (2) statements of internal controls and administrative procedures required to be developed and implemented under the new regulations. Such a system should include specific milestones and timetables for the Department of Education to use in approving the agencies' standards and statements. |
On March 11, 1988, Education provided written guidance to the guaranty agencies concerning its responsibility for enforcing its own collection standards, which must be approved by Education. No further action is necessary.
|
Full Report
Public Inquiries
Topics
Collection proceduresDebt collectionDelinquent loansGovernment guaranteed loansLoan defaultsLoan interest ratesLoan repaymentsProgram managementStudent loansStudent loan default