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Pursuant to a congressional request, GAO evaluated the Department of Education's database on Stafford student loans and how Education could use such data to prevent loan abuses.
Recommendations for Executive Action
|Department of Education||1. The Secretary of Education should direct guaranty agencies to: (1) ensure that their student-loan data are as accurate and complete as practical, with special emphasis given to data on defaulted borrowers; and (2) provide updated information to Education.|
|Department of Education||2. The Secretary of Education should report the ability of ineligible borrowers to obtain loans as a material internal control weakness under the Federal Managers' Financial Integrity Act (FMFIA).|
|Department of Education||3. The Secretary of Education should take immediate action to analyze the data it now has and, until the National Student Loan Data System is developed and implemented, provide to guaranty agencies on a periodic basis the data needed to prevent defaulters from obtaining new loans. This information should also be used to stop and recover federal interest payments on loans obtained by defaulted borrowers.|
|Department of Education||4. The Secretary of Education should take immediate action to develop a more comprehensive annual report that gives guaranty agencies the data they need to more efficiently detect loan limit abuses. In addition, the Secretary of Education should require guaranty agencies to use the report.|
|Office of Inspector General||5. The Office of Inspector General, Department of Education, should follow up on the data and documents GAO provided on defaulters who have obtained new loans and take appropriate action.|