Colleges and universities are finding that improvements in the guaranteed student loan process are making it more attractive than direct lending. In its third year, the direct lending program's total loan volume remains at 33%, well below the 50% goal set in originating legislation. Even some of its strongest supporters fear the program will have…

Discusses how the direct-lending program, popular with colleges, may be doomed; a lawsuit and changing political fortunes pose threats to the system. (EV)

Describes how college lobbying groups are squabbling over how much students should be able to borrow in federal student loans. (EV)

Describes how, as new competitors lobby for legislation for further open the student loan market to them, Sallie Mae and other lenders have responded by attacking the loan consolidation program. (EV)

Reports on continued growth of Sallie Mae, the nation's largest financer of federal student loans. Notes the company's purchase of the USA Group, the nation's largest student loan guarantee agency, competition with the federal direct loan program, political contributions to legislators who set loan policies, and development of Laureate, a…

Public officials and student aid experts agree that the federal program delivery system is outdated, inefficient, and vulnerable to fraud, but they disagree on how bad the situation is and whether the Education Department has the structure necessary to fix it. A 1995 project to integrate all federal grant and loan programs into one system has not…

The federal Department of Education will help college students save money on loan interest if they consolidate loans in the direct lending program while in college. Some college lobbyists feel the administration has not done enough to cut fees and help students and colleges and, as a result, may lose direct-loan participants to bank-loan programs.…

The Clinton Administration's proposed overhaul of the guaranteed student loan program would pay banks the amount of unpaid federal student loans, making the government the sole insurer of the loans. Guarantee agencies feel this action would strip them of their primary tasks of reimbursing lenders for unpaid loans. The initiative is intended to…

The student loan default rate was 9.6% in 1996, a decline of 12.8% since the 1990 peak, saving the federal government $3 billion over six years. Since 1993 the Department of Education has barred 1065 institutions, mostly for-profit trade schools, from participating in federal student loan programs; institutions with a 40% default rate can lose…

Describes how supporters for TRIO and Gear Up, the two main federal programs that encourage low-income students to prepare for college, are girding for a battle over a proposed budget merger. (EV)

A recent Department of Education study, developed with the assistance of the Internal Revenue Service, found that of 2.3 million Pell Grants in 1995-96, 102,000 went to students who failed to report or underreported family income. More than 300 recipients had each underreported income by over $100,000. The report comes when the Clinton…

A top aide to Vice President Gore has been chosen to lead the U.S. Department of Education's effort to modernize delivery of financial aid to students and colleges. His office is the first federal government entity to be run as a "performance-based organization." Some fear he may politicize the office that lawmakers specified be led by a…

The implications of the 1998 Higher Education Act Amendments for students and institutions are summarized, including those for federal student financial aid programs, loan guarantee agency reforms, distance-education programs, student and institutional eligibility, campus crime, college costs, federal outreach and student service programs,…

President Bill Clinton used the declining default rate on college student loans as a basis for proposing tax breaks for college costs. Reduced defaults have saved taxpayer money and helped reduce the federal deficit. Over 150 colleges and universities, including 25 private institutions, risk losing eligibility for federal grant and loan programs…

The Department of Education's Inspector General has identified and prosecuted 17 cases where borrowers received large amounts in student loans by claiming falsely to be pursuing studies at foreign institutions. Officials see serious statutory, regulatory, and program deficiencies that may expose programs to more fraud and abuse. Critics feel the…