oversight

Supplemental Student Loans: Legislative Changes Have Sharply Reduced Loan Volume

Published by the Government Accountability Office on 1990-08-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

GAO                Fact Sheet for the Chairman,
                   Committee on Labor and Human
                   Resources, U.S. Senate


August   1990
                   SUPPLEMENTAL
                   STUDENT LOANS
                   Legislative Changes
                   Have Sharply Reduced
                   Loan Volume




GAO/HRD-90-149FS
GAO
             C’nited States
             General Accounting Office
             Washington, D.C. 20548

             Human Resources Division




             August 3, 1990

             The IIonorable Edkvard M. Kennedy
             Chairman, Committee on Labor
                and Human Resources
             I.nited States Senate

             Dear Mr. Chairman:

             This report responds to your request for information on the possible
             impact of revised eligibility requirements on the volume of Supple-
             mental Loans for Students (SW). These are market-rate loans made to
             postsecondary students in addition to or in lieu of other financial aid.
             such as Stafford loans (formerly called guaranteed student loans) and
             Pell grants.

             Specifically, you requested data comparing SIX volume during the first 4
             months of calendar years 1989 and 1990 from each of the nine guaranty
             agencies that we previously reported on,’ and from the h’ew York State
             IIigher Education Services Corporation. These 10 agencies are listed in
             appendix I. You asked us to provide, for each guaranty agency, data on
             the volume of loans made to students attending proprietary (trade)
             schools and other postsecondary education institutions.

             On *July 2: 1990, we briefed your office on the preliminary results of our
             analysis. This fact sheet summarizes the information provided at that
             meeting.


             Loans under the SW program are made by lenders, such as banks. credit
Background   unions, or savings and loan associations, and guaranteed against default
             by guaranty agencies. Graduate and certain undergraduate students-
             generally those responsible for their own financial support-may
             borrow up to $4,000 per year, to a maximum of $20,000. Borrowers are
             eligible for SIS regardless of their income or assets, in contrast to Staf-
             ford loans and Pell grants, which are based on a borrower’s financial
             needs and resources.

             SIY have variable interest rates, which are adjusted annually to account
             for changes in Department of Treasury borrowing rates. For the 1989-90
             award year, the interest rate was 12 percent. Repayment of these loans




              Page 1                      GAO/HRD-SO-149FS   Supplemental   Student   Loan Decreases
                      B-237438




                      must generally begin within 60 days of the last loan disbursement fol
                      each year a loan is received.

                      The Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239)
                      made several changes to the SIX program. For example. beginning on
                      *January 1, 1990, no SIH loans can be made to undergraduate students
                      (except those already enrolled and receiving loans on the date of enact-
                      ment of the act) who attend schools that have default rates in excess of
                      30 percent-as determined by the Department of Education. The act
                      also excluded from eligibility students without a high-school diploma 01
                      a certificate of high-school equivalency.

                      The annual sts volume totaled $7 11 million in fiscal year 1987, $2 billion
                      in fiscal year 1988. and $2.1 billion in fiscal year 1989; a total of $4.8
                      billion during these 3 years. However, as loan volume has increased, so
                      have SLS defaults. In fiscal year 1987. there was $16 million paid to
                      lenders for default claims, $40 million in fiscal year 1988, and $295 mil-
                      lion in fiscal year 1989; a total of $351 million during these 3 years. The
                      Department has recently estimated that for fiscal year 1990, default
                      claims may reach $i80 million.


                      We agreed with your office to obtain the requested information from the
Scope and             10 guaranty agencies for fiscal year 1989 and through April 1990 (a
Methodology           total of 19 months). Specifically, the agencies provided information on
                      loans guaranteed during this period. We did not verify the accuracy of
                      the data submitted by the guaranty agencies.

                      The agencies also provided data on their monthly SLSvolume to student
                      borrowers attending proprietary and nonproprietary schools. The
                      results for each of the 10 agencies are shown in appendix II. Vsing this
                      information. we compared the first 4 months of calendar years 1989 and
                      1990 to determine the possible impact on SLSvolume of changes made by
                      the Reconciliation Act.


                       Figure 1 shows that SLSvolume has dropped substantially since the
Overall Loan Volume    revised eligibility requirements became effective. The overall volume for
Has Dropped            the 10 agencies was almost 46 percent lower during the first 4 months of
                       calendar year 1990 than the same period in 1989. This represents a
                       decrease from almost $408 million in 1989 to about $221 million in 1990
                       for that same period (see app. III).



                       Page 2                      GAO/HRD-90.149s   Supplemental   Student   Loan Decreases
                                      B-237438




Figure 1: Total SLS Volume Declined




                                             B      ProprimyKf!Qola
                                             -1-1   NonpfoprietatyScfmok
                                             m      Total



                                      Recent legislative changes appear to have had a significant effect on
Proprietary School                    loans to students attending proprietary schools (see fig. 2). The SLS
SLS Volume Greatly                    volume for such students has plunged further-about       65 percent-than
Reduced                               the overall volume decrease. This represented a decline for proprietary
                                      schools from $275 million for the first 4 months of calendar year 1989
                                      to $97 million for the same period in 1990 (see app. III). In contrast, the
                                      SIS volume decrease for students attending nonproprietary schools was
                                      about 7 percent, a decline from about $132 million in 1989 to
                                      $123 million in 1990.




                                       Page 3                              GAO/HBDLW-149PS   Supplemental   Student   Loan Decreases
-
                                            Is-237438




Figure 2: Proprietary   School SLS Volume
Decreased
                                            120     Millions    of Dollars




                                                        January                    March            April
                                                        Month




                                             As agreed with your office, we did not obtain written comments on this
                                             report. We did, however, discuss its contents with Department of Educa-
                                             tion program officials and incorporated their comments where
                                             appropriate.




                                              Page 4                         GAO/HRLMO-149FS   Supplemental   Student   Loan Decreasrk
\Z’e arc sending copies of the report to other congressional committees.
the Department of Education, and other interested parties. Should you
Lvish to discuss its contents, please call me on (202) 2751793. Other
major contributors to this report are listed in appendix 11’.

Sincerely yours,




                             u
Franklin Frazier
Director. Education
  and Employment Issues




                        .


Page 5                       GAO/HRD90-149FS   Supplemental   Student Loan Decreases
Contents


Letter
Appendix I
Guaranty Agencies
Providing Data for
This Report
Appendix II                                                                                                9
SLS Activity for 10
Guaranty Agencies
Appendix III                                                                                             19
Data for Figures
Appendix IV                                                                                              20
Major Contributors to
This Report
Related GAO Products                                                                                     24

Tables                  Table II. 1: California Student Aid Commission                                     9
                        Table 11.2:Colorado Guaranteed Student Loan Program                               10
                        Table 11.3:Higher Education Assistance Foundation                                 11
                        Table 11.4:Massachusetts Higher Education Assistance                              12
                            Corporation
                        Table 11.5:Nebraska Student Loan Program, Inc.                                    13
                        Table 11.6:New York State Higher Education Services                               14
                            Corporation
                        Table 11.7:Ohio Student Loan Commission                                           15
                        Table 11.8:Pennsylvania Higher Education Assistance                               16
                            Agency
                        Table 11.9:Texas Guaranteed Student Loan Corporation                              17
                        Table II. 10: United Student Aid Funds, Inc.                                      18
                        Table III. 1: Total SLS Volume Declined (Figure 1)                                19
                        Table 111.2:Proprietary School SLS Volume Decreased                               19
                             (Figure 2)



                        Page 6                    GAO/HRD-90-149FS   Supplemental   Student   Loan Decreases
          Contents




Figures   Figure 1: Total SLS Volume Declined                                                3
          Figure 2: Proprietary School SLS Volume Decreased                                  4




           Abbreviation

           SIS       Supplemental Loans for Students


           Page 7                     GAO/HRJMO-149FS   Supplemental   Student   Loan Decreases
Appendix I

Guaranty Agenciesproviding Data for
This Report

                  California Student Aid Commission, Sacramento, California
Agency Name and
Location          Colorado Guaranteed Student Loan Program, Denver, Colorado

                  Higher Education Assistance Foundation, St. Paul, Minnesota

                  Massachusetts Higher Education Assistance Corporation,
                   Boston, Massachusetts

                  Nebraska Student Loan Program, Inc., Lincoln, Nebraska

                  Sew York State Higher Education Services Corporation,
                    Albany, Sew York

                  Ohio Student Loan Commission, Columbus, Ohio

                  Pennsylvania Higher Education Assistance Agency,
                    Harrisburg, Pennsylvania

                  Texas Guaranteed Student Loan Corporation, Austin, Texas

                  Irnited Student Aid Funds, Inc., Indianapolis. Indiana




                                        .

                  Page 8                      GAO/HBDW-149PS   Supplemental   Student   Loan Decreases
Appendix II

SLSActivity for 10 Guaranty Agencies(October
1988-Aprill990)

Table 11.1:California   Student Aid
Commission                                                           Kind of school
                                      Fiscal year 1989        Proprietary      Nonproprietary                 Total
                                      October                 $12,006,248           $10.452.101        822,458,349
                                      November                 12,051 242             8,225.506         20,276,748
                                      December                 11,224,382             7,660,281         18,884,663
                                      1st quarter total       35,281,872            26,337,888          61,619,760
                                      January                   13,711.058            7,436.685          21,147,743
                                      February                  13,167,370            6.758,302          19,925,672
                                      March                      7.751,898            8,151,639          15903,537
                                      2nd quarter total        34,630,326           22,346,626           56,976,952
                                      April                     16,210.271            6,739,148          22,949,419
                                      %                         12,469,557            5,994.408          18,463,965
                                      June                      13,475034             6.086.248          19,561,282
                                      3rd quarter total        42,154,862           18,819,804           60,974,666
                                      July                      12679,376             8.667,792          21,347,168
                                      August                    11,634.948           13,745,354          25,380,302
                                      September                 13.369,865           11,837,348          25,207,213
                                      4th quarter total-       37,684,189           34,250,494           71,934,683

                                      Fiscal year 1990
                                      October                   17 249,953            12,993,834         30,243,787
                                      November                  10,455,635             8,911,676         19,367,311
                                      December                  10,327,181             7,797 412         18,124,593
                                      1 st quarter total   38,032,769                29,702,922          67,735,691
                                      January                    5,468,334             6 597,314          12,065,648
                                      February                      917,412            4,865,206           5,782,618
                                      March                       3.354.150            5.510,245           8,864,395
                                      2nd auarter total          9.739.896           16,972,765           26,712,661

                                      Awl                       $3.168.827            $5 126063           88,294,890




                                       Page 9              GAO/HRD-90.149FS   Supplemental   Student   Loan Decreases
                                         Appendix II
                                         SLS Activity for 10 Guaranty   Agencies
                                         (October 199&Aprill990)




Table 11.2:Colorado Guaranteed Student
Loan Program                                                                                 Kind of school
                                         Fiscal year 1989
                                                       --___                          Proprietary      Nonproprietary          --__       Total
                                                                                                                                            .-
                                         October                                       $3,510,754            $1,463,943            $4,974,697
                                         November                                       3,298,795               915,125             4,213,920
                                         December                                       2,825,587               643,211        -    3,468,798
                                         1st quarter total                              9,63&l 36             3,022,279            12,657,415
                                         January                                         3,235,970               575,849            3,811,819
                                         February                                        2,818,403               706,021            3,524,424
                                         March                                           3529,373                827,081            4,456,454
                                                                                                                                      .___
                                         2nd quarter total                              9,683,746             2,108,951            11,792,697
                                         Aprd                                            3,227,714               458,078            3,685,792
                                         May                                             2,496,969               731,951            3,228,920
                                         June                                            3,263,996             1,173,708            4,437,704
                                         3rd quarter total                              8,988,679             2,363,737            11,352,416
                                         July                                            2,688,576             1,126,763            3,815,339
                                         August                                          3,632,933             2,235,850            5,868,78i
                                         September                                       3,447,818             1,755,886            5,203,704
                                         4th quarter total                              9,769,327             5,118,499            14,887,826

                                         Fiscal year 1990
                                         October                                         3,100,409             1,633,801              4,734,210
                                         November                                        25736,139             1,084,858              3,820,997
                                         December                                        2,764,644               883,959              3,648,6Oi
                                         1st quarter total                              8,601 ,I 92           3,602,618            12,203,810
                                         January                                         2,119,645               756,631              2,876,276
                                         February                                        I ,792,7&i              796,925              2,589,689
                                         March                                           1,816,572               570,823              2,387,395
                                         2nd quarter total                              5,728,981              2,124,379              7,853,360

                                         ADril                                          $1,961.496              $581.983           82.543.479




                                          Page 10                                  GAO/HRD-9W49FS     Supplemental   Student   Loan Decreases
                                           Appendix II
                                           SL!3 Activity for 10 Guaranty   Agencies
                                           (October 198%April 1990)




Table 11.3:Higher Education   Assistance
Foundation                                                                                      Kind of school
                                           Fiscal year 1989                              Proprietary      Nonproprietary                 Total
                                           October                                       $27.532.941           $18.558.656        $46,091,597
                                           November                                       29.635,974            14.289,504         43,925,478
                                           December                                       20480,403             10.665.728         31,146,131
                                           1 st quarter total                            77,649,318            43513,888          121,163,206
                                           January                                          7.040.015            7,525 230           14,565,245
                                           February                                        17.362.348            9,044,343           26,406,691
                                           March                                           23212,496            10220,741            33,433,237
                                           2nd quarter total                              47,614,859           26,790,314
                                                                                                                    ~--           - -74,405,173
                                           April                                           17,140,768            7,833.247          24,974,015
                                           May                                             12,759.246            4.647.145          17,406,391
                                           June                                            13,349,672            7,999,005          21,348,677
                                           3rd quarter total                              43,249,686           20,479,397           63,729,083
                                           July                                            12,594.739            14,770,177         27,364,916
                                           August                                          16,366,811            24,835,029         41,201,840
                                           September                                       17,306,576            18,471 044         35,777,620
                                           4th quarter total                              46,268,126            58,076,250         104,344,376

                                            Fiscal year 1990
                                            October                                        21,744,350            16,355,942         38,100,292
                                            November                                      -4.288.428             10,155,873          5,867,44i
                                            December                                       11,119502              5,081,070         16,200,572
                                            1 st quarter total                            28,575,424            31,592,885          60,168,309
                                            January                                          7.605.704            7 885.071          15,490,775
                                            February                                         2,662,408            4,799.846           7,462,254
                                            March                                            1,314,209            4,647,957           5,962,166
                                            2nd quarter total                              11,582,321           17,332,874           28,915,195

                                            April                                          $3,108,311            $4,329,210          $7,437.521




                                             Page 11                                  GAO/HRD-90-149FS   Supplemental   Student   Loan Decreases
                                   Appendix II
                                   SLS Activity for 10 Guaranty   Agencies
                                   (October 198%April 1990)




Table 11.4:Massachusetts Higher
Education Assistance Corporation                                                         Kind of school
                                   Fiscal year 1989                              Proprietary       Nonproprietary                 Total
                                   Octooer                                        $1.346 904            $3.337 959          $4,684,863
                                   November                                         1.252 524            -2.272.516          3,525,040
                                   December                                         1.278.929             1 227 534          2,506,463
                                   1 st quarter total                              3,878,357             6,838,009          10,716,366
                                   January                                          1.814.648             1 088 424           2,903,072
                                   February                                         1,6?9,509            -i 5831508           3,263,017
                                   Marcn                                            i 469.361             1,350.361           3,ai 9,722
                                   2nd quarter total                               5,963,518             4,022,293            9,985&i 1
                                   Aprli                                            1.989.445               853,391           2,842,836
                                   vay                                              2.242.105               849,184           3,091,289
                                   June                                             1689.317              2 392,181           4,081,498
                                   3rd quarter total                               5,920,867             4,094,756           10,015,623
                                   July                                             1.854,621              5.766,637          7,621,258
                                   August                                           2.612,393              8 978,612         11,591,005
                                   September                                        2.334.789              7 226,570          9,561,359
                                   4th auarter total                               6.801 .a03           2i.971.819           28.773.622

                                   Fiscal year 1990
                                   October                                          4,113.507             5.994 448          10,107,955
                                   November.                                        3 %6.274              4 000 063           7,356,337
                                   December                                         i 556.446             2 242,388           3,7i8,834
                                   1 st quarter total                              9,026,227            12,236,899           21,263,126
                                   January                                          1 505.308              2 839.441          4,344,?49
                                   February                                         1 088.261              2 305.220          3,393,48i
                                   March                                              959.892              1729.134           2,689,026
                                   2nd quarter total                               3,553,461              6,873,795          10,427,256

                                   April                                           $1.914 576            $1,439.415          $3,353.994




                                    Page 12                                  GAO,‘HRD-‘30149FS   Supplemental   Student   Loan Decreases
                                      Appendix 11
                                      SIS Activity for 10 Guaranty   Agencies
                                      (October 198%April 1990)




Table 11.5: Nebraska   Student Loan
Program, Inc.                                                                             Kind of school
                                      Fiscal year 1989                             Proprietary      Nonproprietary                   Total
                                      October                                       $7,616,382             $847,881            88,464,263
                                      November                                       9.760,308             1 002,253           10,762,561
                                      December                                       5.698.585               631 439            6,330,024
                                      1 st quarter total                           23,075,275             2,481,573            25,556,848
                                      January                                         6.277,798                616.203          6,894,OOl
                                      February                                        6,655,557                647,007          7,302,564
                                      March                                           8,136,797                 538 319         8,675,116
                                      2nd quarter total                             21,070,152              I ,801,529         22,87l,68l
                                      April                                            6,646,780              349,298           6,996,078
                                      May                                              6,849,811               236,903          7,086,714
                                      June                                             4,737,507               289.01 1         5,026,518
                                      3rd quarter total                             I 8,234,098               875,212          19,109,310
                                      July                                            5.440,567                473,650          5,914,217
                                      August                                          7.860,382              1 597,753          9,458,l35
                                      September                                       7,204,302
                                                                                       __-     ~-            1,368,063          8,572,365
                                      4th quarter total                             20,505,251              3,439,466          23,944,717

                                      Fiscal year 1990
                                      October 1989                                    5,996,405              1,011.286           7,007,691
                                      November                                        3,167,616
                                                                                            - ~~~              622,427
                                                                                                        .~~_________             3,790,043
                                      December                                        2,948 921                420.291           3,369,212
                                      1st quarter total                             12,112,942              2,054,004           14,166,946
                                      January                                         2.548,999               393,874
                                                                                                          ~___.._                2,942,873
                                      February                                        1,918,897                345,825           2,264,722
                                      March                                           1,986,77 1               177 023           2,163,794
                                      2nd quarter total                              6,454,667                916,722            7,371,389

                                      April                                          $2.234.096               $157,777          $2,391,873




                                       Page 13                                  GAO;HRDW-149PS      Supplemental   Student   Loan Decreases
                                    Appendix II
                                    SIS Activity for 10 Guaranty   Agencies
                                    (October 1988-Aprill990)




Table 11.6: New York State Higher
Education Services Corporation                                                          Kind of school
                                    Fiscal year 1989                             Proprietary       Nonproprietary                    Total
                                    October                                      $13.225,000            $7,904,000            $21,129,6fJO
                                    November                                      11.465000              6,580,OOO             18,045,000
                                    December                                       9.897,OOO             5361,000              15258,000
                                    1st quarter total                            34,587,000---    ~~~-~%i,845,oti-             54,432,OOO
                                    January                                         7.595.000
                                                                                         ~_ ~_~~~_-~~~4,794,ooo
                                                                                                       .______~                12,389,OOO
                                                                                                                               -~~ .~~~
                                    February                                        9,531,ooo         4,361,OOO                13892,000
                                    March                                           9,694.OOO ~_______4,132,OOO                13,826,OOO
                                    2nd quarter total                             26,820,OOO        13,287,OOO                 40,107,000
                                    April                                            5,134 000               1,803,OOO           6,937,OOO
                                    May                                              7,047 000               2,850,OOO           9,897,OOO
                                    June                     ~~~    ~   __      _.~_ 8,490 000
                                                                                       __..~__      ~_..     6,979,OOO          15,469,OOO
                                    3rd quarter total                              20,671,OOO              11,632,OOO           32,303,OOO
                                    July                                            5.844.000              10,414,000         16,258,OOO
                                    August               ~     ~~~- ~~~_            7,716,OOO
                                                                                    8,883,000~             13,846,OOO
                                                                                                    .~~-13,097,000.-.-~219800 21,562,OOO
                                    September                                                          ___-                        1 1
                                    4th quarter total                             22,443,OOO              37,357,ooo            59,800,OOO

                                    Fiscal year 1990
                                    October                                         8.584,OOO               10430,000           19,014,000
                                    November                                        8,248,OOO                7,591,ooo          15,839,OOO
                                    December                                        6,683,OOO                6,166,OOO          12,849,OOO
                                    1st quarter total                             23,515,OOO               24,187,OOO           47,702,OOO
                                     January                       _.           _-~~~3,351,ooo
                                                                                       --~.. ~~ -            5.133.000           8,484,OOO
                                     February                                        2.363.000               4.843.000
                                                                                                                    .__           7,206,OOO
                                                                                                                             -~~ .~~~.  .~~.
                                     March                                           1,791 000               3,477 000            5,268,OOO
                                     2nd quarter total                              7,505,ooo              13,453,ooo           20,958,OOO

                                     Aprd                                          $2.095,000               $2,767,000          $4,862,000




                                     Page 14                                  GAO/HRlWO-149FS       Supplemental   Student   Loan Decreases
                               Appendix II
                               SU Activity for 10 Guaranty   Agencies
                               (October 19f38-Aprill990)




Table 11.7:Ohio Student Loan
Commission                                                                           Kind of school
                               Fiscal year 1989                               Proprietary      Nonproprietary                    Total
                               October                                         $1,809,753           $1.145657              $2,955,410
                               November                                          1,504,238
                                                                              - .-~~         ~~~        854.806             2,359,044
                               December                                          2 514,985              798.323             3,313,308
                               1st quarter total                                5,828,976            2,798,786              8,627,762
                               January
                               -_____                           ___-            1.861,160                 587 395              2,448,555
                               February                                         1,711,685                 557.400              2,269,085
                               March                                            2.273,793
                                                                               -___-~~~                   560,457
                                                                                                         - ~~~~~~-~            2,834,250
                               2nd quarter total                               5,846,638               1,705,252               7,551,890
                               April                                            1,700,478                 381 627              2,082,105
                               May                                              2,031,060                 542,260              2,573,320
                               June                                     __-     1 615,998                 737.785              2,353,783
                               3rd quarter total                               5,347,536               1,661,672               7,009,208
                               July                                             2,003,998                 892,618              2,896,616
                               August                                           1,884,844
                                                                               ~.____.                  1,706,027
                                                                                                          ~                    3,590,871
                               September                                        1.522,811               1,141,942              2,664,753
                               4th quarter total                               5,411,653               3,740,587               9,152,240

                               Fiscal year 1990
                               October                                           1,809,050               1,260.489             3,069,539
                               November                                          1.314,156                 852.902             2,167,058
                               December                                          1,607,522--------         582 124             2,189,646
                               1 st quarter total                               4,730,728               2,695,515              7,426,243
                               January                                          2,023,261                  841,834             2,865,095
                               February                                            794,864
                                                                              ~-.-.__~                -- 793,712               1,588,576
                               March                                               660,205                 573,227             1,233,432
                               2nd quarter total                               3,478,330                2,208,773              5,687,103

                               ADnl                                              $649,801                $423.749          $1.073.550




                                Page 15                                 GAO/HRD9@149FS         Supplemental   Student   Loan    Decreases
                                  Appendix II
                                  SIS Activity for 10 Guaranty   Agencies
                                  (October    198%April 1990)




Table 11.8: Pennsylvania Higher
Education Assistance Agency                                                           Kind of school
                                  Fiscal year 1989                             Proprietary      Nonproprietary                  Total
                                  October                                       Wi99.789             $1.395.282           $4,295,071
                                  November                                        2 540.691              852.044           3,392,735
                                  December                                        2 857.094              67O:OBO           3,527,174
                                  1st quarter total                              8,297,574            2,917,406           11,214,980
                                  January                                         2.810,938               627,l 10          3,438,048
                                  February                                        2.416,996               427,653           2,844,649
                                  March                                           3 227,199               485.974           3,713,173
                                  2nd quarter total                              8,455,133             1,540,737            9,il95,870
                                  April                                           2.672,292               298.996           2,971,288
                                  tday                                              938,359               400,714           ~1,339,073
                                  June                                            1,573.597             3,274,012           4,847,609
                                  3rd auarter total                              5,184,248             3,973,722            9,157,970
                                  July                                            1.111 021             6,882.071           7,993,092
                                  August                                           1,387 870           13,844,041          15,231,911
                                  September                                          828 092            9,425.134          10,253,226
                                  4th quarter total                               3,326,983           30,151,246           33,478,229

                                   Fiscal year 1990
                                   October                                         1,031.673            6,454,933           7,486,606
                                   ?&ember                                           743.881            3,615,235           4,359,li6
                                   December--                                        317.737            2,027.567           2,345,304
                                   1st quarter total                              2,093,291           12,097,735           14,191,026
                                   January                                           578.053            2.149.137           2,727,190
                                   February                                          376 726            1 312,293           1,689,019
                                   March                                             412,872            1,200.399           1,613,271
                                   2nd quarter total                              1,367,651            4,661,829            6,029,480

                                   April                                           $549.0 12             $864 904          $1,413,916




                                   Page 16                                  GAO/HRD-90.149FS   Supplemental   Student   Loan Drcrrasrs
                                        Appendix II
                                        SIS Activity for 10 Guaranty Agencies
                                        (October 198%April1990)




Table 11.9:Texas Guaranteed   Student
Loan Corporation                                                                              Kind of school
                                        Fiscal year 1989                               Proprietary      Nonproprietary               Total
                                        October                                         $9,898,074            $X563,653       $14,461,727
                                        November                                        10,272,599             4.261.320       14,533,919
                                        December      ~.~      _                         9,519.919             3,347,252       12,867,171
                                        1st quarter total                              29,690,592            12,172,225        41,862,817
                                        January                                         10,565,503              2.179,583      12,745,086
                                        February                                        10.011,576              2.420,502      12,432,078
                                        March                            -_____-         9,630.035              2.484,085      12,114,120
                                        2nd quarter total                              30,207,1%-              7,084,170       37,291,284
                                        April                                            7,777,521              1,987.814       9,765,335
                                        May                        --~                 ~~~.484,595
                                                                                         9                      1 801,602      11,286,197
                                        June                                             9,964.058              3,444,432      13,408,490
                                        3rd quarter total                              27,226,174              7,233,848       34,460,022
                                        July                         ~~~            -~-~-- 4,443,690    .-      2,863.985       7,307,675
                                        August                                            6,626,641             5871,016       12,497,657
                                        September ~-.-~                                    5,814.340
                                                                                                ---~---         5,005,389      10,819,729
                                        4th quarter total                               16,884,671            13,740,390       30,625,061

                                        Fiscal year 1990
                                        October                                           5,588,711             4,818,925      10,407,636
                                        November                                          6,045,319             3.546,859       9,592,178
                                        December                                          5,057.954             2,165.295       7,223,249
                                        1 st quarter total                              16,691,984            10,531,079       27,223,063
                                        January                    -~________-        -- 2.843.685              1,935.146        4,778,831
                                        February                                          1,513.573             2,279,916        3,793,489
                                        March                                             2 072,767             1.786,474        3,859,241
                                        2nd quarter total                                6,430,025             6,001,536        12,431,561

                                        April                                           $13638,632             $1.424.895       $3.063.527




                                         Page 17                                   GAO/HRlHO-149FS      Supplemental Student Loan Decreases
                                         Appendix II
                                         SLS Activity for 10 Guaranty   Agencies
                                         (October 19%Aprill990)




Table 11.10: United Student Aid Funds,
Inc.                                                                                          Kind of school
                                         Fiscal year 1989                             Proprietary       Nonproprietary                 Total
                                         October                                       $6,421,664            $14 597 014        $21,018,978
                                         November                                       5,554,797             11.600,433         17,155,230
                                         December                                       5,341,712              9,070 902         14,412,614
                                         1 st quarter total                           17,318,473             35,268,349          52,586,822
                                         January                                         5.857,693            9.161.355          15,019,048
                                         February                                        5,229,036            7 644,857          12,873,893
                                         March                                           6.523,387            7,739,290          14,262,677
                                         2nd quarter total                             17,610,116     ~-~___24,545,502           42,155,618
                                         Apnl                                            4,875,349             6.574,014         11,449,363
                                         May                                             4,244,248             7.627,164         11,871,412
                                         June                                            6,199,040            13,269,598         19,468,638
                                         3rd quarter total                             15,318,637            27,470,776          42,789,413
                                         July                                            5,323,972            15,979 820         21,303,792
                                         August                                          6,253,860            25.323.530         31,577,390
                                         September                                       6,765,259            19,448,605         26,213,864
                                         4th quarter total                             18,343,091            60,751,955          79,095,046

                                         Fiscal year 1990
                                         October                                         7,898.833            20,060,339          27,959,172
                                         November                                        6,280.158            14,131,839          20,411,997
                                         December                                        6,077 976            10.967.264          17,045,240
                                         1st quarter total                             20,256,967            45,159,442           65,416,409
                                         January                                         5,738 420             9.909 149          15,647,569
                                         February                                        4,881 529             9,442 520          14,324,049
                                         March                                           7.640,026             8,553 568          16,193,594
                                         2nd quarter total                             18,259,975            27,905,237           46,165,212

                                          April                                         $5,940 017            $7.859 936        $13,799,953




                                                                        .

                                          Page 18                                  GAO/HRD90-149FS    Supplemental   Student   Loan Decreases
Appendix III

Data for Figures


Table 111.1:Total SLS Volume Declined
(Figure 1)                              Month                 Calendar  year 1989        Calendar      year 1990
                                        January                        $95,361,617                   $72,223,006
                                                                                                    .____
                                        February                       104734,073                     50,093,897
                                        March                          113,038,286                    50.234.314
                                                                     --___
                                        April                           94.653,231                    48,234,700

                                        Total                        $407,787,207                   $220,785,91


Table 111.2:Proprietary School SLS
Volume Decreased (Figure 2)                                       Kind of school
                                        Month/year         Proprietary      Nonproprietary                 Total
                                        January1989        $60,769,783           $34.591,834        $95,361,617
                                        February 1989       70,583.480            34,150,593        104,734,073
                                        March1989           76.548,339            36.489,947        113,038,286
                                        Aprlll989           67,374,618            27,278,613         94,653,231
                                        January 1990        33.782,409            38,440 $9'         72,223,006
                                        February 1990       18,309,434            31,784.465         50,093,897
                                        March 1990          22,008,464            28,225,850         50,234,314
                                        April1990           23,259,768            24.974.932         48,234,700




                                         Page 19        GAO/HRD90-149FS   Supplemental   Student   Loan Decreases
Appendix IV

Major Contributors to This Report


                          .Joseph .J. Eglin, Assistant Director, (202) 40 l-8623
Human Resources           Christopher C. Crissman, Assignment Manager
Division,
Washington, D.C.

                          Charles M. Novak, Regional Assignment Manager
Seattle Regional Office   Charles H. Shervey, Evaluator-in-Charge
                          R. Jerry Aiken, Programmer/Analyst




                          Page 20                       GAO/HRIMO-149FS   Supplemental   Student   Loan Decreases
Page 21   GAO/HRD-90-149FS   Supplemental   Student   Loan Decreases
Page 22   GAO/HRD-90-149FS   Supplemental   Student   Loan Decreases
Page 23   GAO/HRDM-149FS   Supplemental   Student   Loan Decreases
RelatedGAO Products


             Consolidated Student Loans: Borrowers Benefit but Costs to Them and
             the Government Grow (GAO!HRD-90-8, .June 15, 1990)

             Guaranteed Student Loans: Credit Bureau Reporting Practices by Guar-
             anty Agencies and Lenders (GAO~HRD-9%~IISR,Apr. 9. 1990)

             Supplemental Student Loans: Who Are the Largest Lenders? (GAO
             ffRfxw72E, Feb. 21. 1990)

             GAO Views on the Stafford Student Loan Program (GAO/T-HRD-90-13, Feb.
             20, 1990)

             Supplemental Student Loans: Who Borrows and Who Defaults (640
             ~IRD-~o-~~FS:Oct. 17, 1989)

             Guaranteed Student Loans: Analysis of Student Default Rates at 7,800
             Postsecondary Schools (GAO/HRD-89-63BR, July 5, 1989)

             Defaulted Student Loans: Preliminary Analysis of Student Loan Bor-
             rowers and Defaulters (GAOIHRD-88-112~~, June 14, 1988)

             GAO’S Views on the Default Task Force’s Recommendations for Reducing
             Default Costs in the Guaranteed Student Loan Program (GAO,/T-fIRD-88-T.
             Feb. 2, 1988)

             Guaranteed Student Loans: Potential Default and Cost Reduction
             Options (GAOiHRD-88-52BR, Jan. 7, 1988)

             Guaranteed Student Loans: Analysis of Insurance Premiums Charged by
             Guaranty Agencies (GAOIHRD-88-16~~: Oct. 7, 1987)

             Guaranteed Student Loans: Legislative and Regulatory Changes Needed
             to Reduce Default Costs (GAOIIIRD-85-76, Sept. 30, 1987)

             Defaulted Student Loans: Private Lender Collection Efforts Often Inade-
             quate (GAOIIIRD-87-48, Aug. 20, 1987)

             Defaulted Student Loans: Guaranty Agencies’ Collection Practices and
             Procedures (GAO,HRD-s~-~I~BR, July 17, 1986)




(104tm)       Page 24                   GAOjHRD-YO-149FS   Supplemental   Student   Loan Decreases