In the current implementation of the Federal Direct Student Loan Program, there are lessons to be learned from past higher education loan programs, better ways to administer these programs and direct loans, and points to remember as direct loans are implemented. Current guaranteed student loan programs have been the subject of scrutiny recently because of rising costs related to defaulted loans and Department of Education inefficiencies. Loan program problems have involved program structure, weak gatekeeping procedures, and inadequate financial and management systems. Many of these problems will require the continued attention of the Congress and the Department of Education regardless of implementation of a new direct loan structure. Other issues that could be addressed include continuing to strengthen the Department's gatekeeping procedures, strengthening the incentives for effective loan servicing, and expediting efforts to develop a comprehensive plan to correct Department financial and management systems. A comprehensive strategy is needed for the direct loan conversion effort which should address the management and oversight of the conversion, human resources and support requirements, loan servicing and support to schools and students, and management and the winding down of the guaranteed loan portfolio. (Lists 13 related Government Accounting Office publications.) (JB)