Requirements for forming state guarantee agencies in the Guaranteed Student Loan Program are presented, based on two previous reports: "Perspectives on State Guaranteed Student Loan Programs" (March 23, 1979) and "Status Report on Non-Agency States" (March 29, 1979). After introductory material on background, purposes, and methodology, this report provides information on the following subjects, each of which comprises a chapter: organization and staffing; operations; revenues and expenses; management information, reporting and EDP support; and default rates. A final section contains recommendations intended to assist representatives of states that are considering the feasibility of a guarantee agency and/or planning the implementation of such an agency. Appendices to this volume contain descriptions of technical assistance, summary of the data collection guide, guarantee agency functions and status by state, and direct loan programs. Examples of the numerous recommendations are these: a "task force" approach to study issues should be used by states considering the formation of a guarantee agency; loan availability and default rates should be included within the scope of the study; multi-year financial projections should be performed; program planning should address all guarantee agency functions; and new agency procedures should be documented. (LC)