This report examines how the Department of Education calculates the default rate for two federal student loan programs--the Federal Family Education Loan program (FFELP) and the William D. Ford Federal Direct Loan Program (FDLP). The report focuses on three questions regarding these programs: (1) whether there has been an increase in the number of…

A proposed change in federal student loan policy from providing loans through lending institutions to providing loans directly to students is of enormous importance to higher education, with major implications for colleges and universities. There are powerful arguments pro and con. Institutions must ensure they and policymakers understand the…

Section 439A of the Education Amendments of 1976 restricts the dischargeability of federal student loans to cases of "undue hardship." The origin, applications, and legal procedures involved in Section 439A and in Section 523(a) of the new Bankruptcy Code are examined and suggestions are made for determining the meaning of "undue…

Implications for future generations of college loan program changes are examined. The idea of who should pay for college is explored from the perspective of economic theory. It is concluded that new loan programs must be monitored carefully so they do not shift the burden of college payment from parents to students. (MSE)

The failure of students to repay federally insured loans has led to an increased emphasis on default prevention and threatens institutions with high default rates with exclusion from federal student aid programs. Prior studies of default prevention using theoretical constructs based on economics, sociology, and psychology have yielded mixed…