Perkins Student Loans: Need for Better Controls Over Loans Recovered From Closed Schools
HRD-91-70
Published: Mar 27, 1991. Publicly Released: Mar 27, 1991.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Education's Perkins Student Loan Program, focusing on Education's policies, procedures, and practices for recovering Perkins loan fund assets from schools that go out of business.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Education | To provide reasonable assurances that its Perkins Student Loan Program assets are being properly safeguarded from loss, the Secretary of Education should revise Education's policies and procedures to provide guidance for: (1) accurately determining the net federal investment in schools' Perkins loan funds; and (2) promptly reconciling the amount of each closed school's cash and outstanding loans with the net federal investment in the fund, as recorded by Education. |
After interim guidelines were issued in September 1991, Education incorporated the new procedures in its campus-based program manual.
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| Department of Education | To provide reasonable assurances that its Perkins Student Loan Program assets are being properly safeguarded from loss, the Secretary of Education should increase Education's capacity for the timely processing of loans from closed schools. |
Education awarded a new contract on April 30, 1992, which will be effective on October 1, 1992, to process backlogged Perkins loans from closed schools.
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