oversight

Guaranteed Student Loans: Credit Bureau Reporting Practices by Guaranty Agencies and Lenders

Published by the Government Accountability Office on 1990-04-09.

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

                  United   States   General   Accounting   Office
                  Briefing Report to the Chairman,
GAO               Subcommittee on Education, Arts,
                  and the Humanities, Committee on
                  Labor and Human Resources, U.S.
                  Senate
April1990
                  GUARANTEED
                  STUDENT LOANS                                     ’
                  Credit Bureau
                  Reporting Practices by
                  Guaxmty Agencies
                  and Lenders




                                                                    i




 GAO/HRD9O-71B~
United States
General Accounting  Office
Washington, D.C. 20648

Human Resources         Division

B-238707
April 9, 1990

The Honorable Claiborne Pell
Chairman, Subcommittee on Education,
  Arts, and the Humanities
Committee on Labor and Human
  Resources
United States Senate
Dear Mr. Chairman:
This report respondsto your request for information on the implementa-
tion of provisions in the Higher Education Amendments of 1986
(P.L. 99-498) which require guaranty agenciesand lenders to report
information on Stafford student loan program borrowers to credit
bureaus.’ The purpose of these provisions is to promote greater bor-
rower responsibility and repayment of student loans, thus helping to
reduce growing loan default costs. In particular, you wanted informa-
tion on how guaranty agenciesand lenders implemented these provi-
sions, as well as their effect on students according to whether they
repay or do not repay their loans.

On December 13, 1989, we briefed your office on the results of our anal-
ysis. This report summarizes and elaborates on the information pro-
vided at that meeting. (Seeapp. I.)

  Credit bureau reporting on borrowers by guaranty agenciesand lenders
:,first was required by Title XVI of the Student Financial Assistance
  Amendments of 1985 (P.L. 99-272). The act subsequently was modified
  by the 1986 amendments and the Higher Education Technical Amend-
  ments of 1987 (P.L. 100-50). Each guaranty agency, eligible lender, or
  other holder must enter into agreementswith credit bureaus to
  exchangeinformation about student loan borrowers. Such agreements
  are to provide that for each borrower, the loan holder should report
  with respect to any loan that has not been repaid by the borrower the
  following:
 1. The total amount of loans made to the borrower and the outstanding
 balance.


 ‘Guaranty agencies act as a “middlemen” between the Department of Education and the lenders. As
 such, they insure the loans made by the lenders to students.



 Page 1                        GAO/HRD-W71BB       Reporting   of Student   Loans to Credit Bureaua
                     B-288707




                     2. For borrowers who default, the date of default and information con-
                     cerning collection of the loan, such as the borrower’s repayment status
                     on the defaulted loan.

                     3. The date a loan is cancelled either through payment by the borrower
                     or payment of a default claim by the Secretary of Education.

                     A lender is responsible for periodically reporting such information for
                     both borrowers who are making payments as agreed and those who are
                     delinquent in their payments. The guaranty agency reports similar
                     credit information when borrowers default and the agency reimburses
                     the lender’s default claim.

                     The Department of Education requires guaranty agenciesto report to
                     six nationwide credit bureaus.2Lenders must report to at least one
                     credit bureau, either a local bureau or one of the national bureaus iden-
                     tified for guaranty agency reporting.


                     As discussedwith your office, we agreed to develop information on the
Objectives, Scope,   degreeof compliance by guaranty agenciesand lenders with the report-
and Methodology      ing provisions of P.L. 99-498. In addition, we agreed to obtain the opin-
                     ions of guaranty agency and lender representatives on (1) the
                     effectiveness of the credit bureau reporting requirements in preventing
                     defaults; (2) the impact credit reporting is having on the availability of
                     other kinds of consumer credit for student loan borrowers; and (3)
                     improvements that could be made to existing legislative, regulatory, or
                     other Department of Education requirements.

                     We developed two questionnaires to obtain the neededinformation-
                     one each for the guaranty agenciesand lenders. We had a lOOpercent
                     responserate for all guaranty agencies,and 18 of the 19 judgmentally
                     selectedlenders responded.The lenders’ responsescannot be considered
                     representative of all Stafford loan lenders, particularly small holders of
                     student loans. (Summaries of the agencies’and lenders’ responsesto
                     each question, including more detail on our methodology, are contained
                     in apps. II and III, respectively.)



                     21nDecember 1986, the Department had identified as national credit bureaus: Associated Credit
                     Bureaus, Inc.; Associated Credit Services; Chilton Corporation; The Credit Bureau, Inc., of Georgia;
                     TRW Credit Data; and Trans Union Corporation.




                     Page 2                          GAO/ERD9@71BR        Reporting   of Student   Loam to Credit   Buream
                                       B-238707




                                       All guaranty agencieshad agreementswith and/or reported to at least
Degreeof Compliance                    one of the six national bureaus, although only three agencieshad
by Guaranty Agencies                   entered into agreementswith all six bureaus. All lenders had reported to
and Lenders                            at least one bureau. The most prevalent reason cited by the agenciesfor
                                       not reporting to all six bureaus was confusion over whether the six
                                       national credit bureaus identified by the Department were all actually
                                       credit bureaus and whether they constituted six separate organizations.


                                       The majority of guaranty agenciesand lenders believed that credit
Possible Effect on                     bureau reporting has had a positive effect on reducing the number of
Preventing Defaults                    defaults. (Seetable 1.)
Table 1: What Has Been the Effect on
Reducing Defaults?                     Figures are percentages
                                       Effect                                          Guaranty agency                Lender
                                       Little or no                                                  13.1                 5.6
                                       Some or moderate                                              42.2                66.6
                                       Great or very great                                           23.6                11.1
                                       No basis to iudoe
                                                      s   ”
                                                                                                     21.1                16.7
                                       Totals                                                      loo.0                loo.0



                                       The credit bureau reporting requirements were intended to help build a
Impact on Borrowers’                   positive credit history for student loan borrowers who repaid their loans
Ability to Obtain                      on time. Conversely, these requirements also would negatively affect
Other Consumer                         student borrowers who were delinquent or had defaulted on their loans.
                                       Nearly all guaranty agenciesbelieved that borrowers who defaulted
Credit                                 would be hindered by the credit bureau provisions when attempting to
                                       obtain other consumer credit (seetable 2). However, the majority of the
                                       agenciessaid they had no basis to judge the impact the provisions were
                                       having on borrowers who were delinquent or borrowers who were mak-
                                       ing payments on time.

                                       A majority of lenders believed that the provisions hindered delinquent
                                       borrowers or those who defaulted on their loans, while helping borrow-
                                       ers who pay on time.




                                       Page 3                    GAO/FJRD90-71BB Reporting of Student Loans to credit Bureaus
                                       5238707




Table 2: What Has Been the Impact on
Obtaining Other Consumer Credit?       Figures are percentages
                                       Impact on                                              Guarantv aoencv                   Lender
                                       Borrowers who have defaulted:
                                         No effect                                                            2.6                     0.0
                                         Hindered somewhat                                                   31.5                     0.0
                                         Hindered greatly                                                    58.0                    66.7
                                         No basis to judge                                                    7.9                    33.3
                                         Total                                                              100.0                   100.0
                                       Borrowers who have been delinquent:
                                         Helped greatly                                                       2.6                     0.0
                                         No effect                                                            2.6                     0.0
                                         Hindered somewhat                                                   36.8                    66.7
                                         Hindered greatly                                                     2.6                     0.0
                                         No basis to judge                                                   55.4                    33.3
                                         Totals                                                             loo.0                   100.0
                                       Borrowers who oav on time:
                                         Helped greatly                                                       5.3                    16.7
                                         Helped somewhat                                                     23.7                    38.9
                                         No effect                                                            5.3                     0.0
                                         No basis to judge                                                   65.7                    44.4
                                         Totals                                                             100.0                   100.0



                                       We asked the guaranty agenciesand lenders for their opinions on poten-
Possible Changesto                     tial changesto existing legislative, regulatory, or departmental guid-
Existing Credit Bureau                 ance.Most guaranty agenciesand lenders were opposedto a changethat
Reporting                              would require deleting a bad credit rating if a delinquent account was
                                       subsequently made current or was paid in full after defaulting (see
Requirements                           table 3). However, the majority of guaranty agenciesand half of the
                                       lenders believed that the credit bureau provisions should be changedto
                                       allow deleting a bad credit rating at the option of the agency or lender.
                                       The agencies’and lenders’ responsesto our questions regarding possible
                                       changesare shown on pages37-38 and 48-49.
Table 3: What Changes Could Be Made
to Current Requirements?               Figures are percentages
                                                                                      Guaranty agency                      Lender
                                       Possible   ChanQe                               Yes          No              Yes               No
                                       A bad credit rating should be deleted if the
                                         loan is paid up                               16.7          83.3           11.1             88.9
                                       The agency/lender should have the option
                                         of deleting a bad rating                      68.4          31.6           50.0             50.0




                                       Page 4                       GAO/~90-71BB        Reporting of Student Loam to &edit Bureaus
                        B238707




                        The guaranty agenciesalso said they would like to have fewer national
                        credit bureaus to report to.

                        The guaranty agenciesand lenders provided us with additional informa-
Other Key Results       tion on their credit bureau reporting practices. For example:
                    .   Most agenciesreport new defaulters to bureaus at least monthly
                        (97.3 percent) and update records of previously reported defaulters at
                        least monthly (83.8 percent).
                        Most agenciesbelieve that credit bureau reporting has had at least some
                        effect on improving their postdefault collections (94.8 percent).
                        All the lenders (1) report all new borrowers monthly and (2) update
                        their records monthly.
                        Most lenders update borrower records to show delinquencies within
                        90 days (77.8 percent).

                        As requested by your office, we did not obtain written comments on this
                        report from the Department of Education or other interested parties.
                        However, we did discussits contents with officials from the Department
                        and incorporated their views where appropriate.
                        We are sending copies of this report to other congressionalcommittees,
                        the Department of Education, and other interested parties. Should you
                        wish to discuss its contents, please call me on (202) 275-1793.Major con-
                        tributors to the report are listed in appendix IV.

                        Sincerely yours,




                        Franklin Frazier
                        Director, Education
                          and Employment Issues




                        Page 6                GAO/HRIMO-71BB Reporting of Student Loans to Credit Burea~e
Contents


Letter
Appendix I                                                                                              8
Guaranteed Student
Loans: Credit Bureau
Reporting Practices by
Guaranty Agencies
and Lenders
Appendix II                                                                                           29
Summary of
Responsesto GAO
Survey of Guaranty
Agencies
Appendix III
Summary of
Responsesto GAO
Survey of Lending
Institutions
Appendix IV                                                                                           50
Major Contributors
to This Report
Related GAO Products                                                                                  52

Tables                   Table 1: What Has Been the Effect on Reducing Defaults?                        3
                         Table 2: What Has Been the Impact on Obtaining Other                           4
                             Consumer Credit?
                         Table 3: What ChangesCould Be Made to Current                                  4
                             Requirements?




                         Page 6               GAO/‘HRB9@71BR Reporting of Student Loans to Credit Bureaus
          Contents




Figures   Figure I. 1: Guaranteed Student Loans                                                  8
          Figure 1.2:Background                                                                  9
          Figure 1.3:Objectives                                                                 10
          Figure 1.4:Scope                                                                      11
          Figure 1.5:Methodology                                                                12
          Figure 1.6:Results: Compliance With Provisions                                        13
          Figure 1.7:Results: Effectiveness in Reducing Defaults                                14
          Figure 1.8:Results: Impact on Obtaining Other Consumer                                15
              Credit
          Figure 1.9:Results: PossibleChangesto Current                                         18
              Provisions
          Figure I. 10: Guaranty Agencies:Other Key Results                                     19
          Figure I. 11: Lenders: Other Key Results                                              23




          Abbreviations

          ACB        Associated Credit Bureaus, Inc.
          Acs        Associated Credit Bureaus
          CBI        The Credit Bureau, Inc. of Georgia
          GAO        General Accounting Office
          TRU        Trans Union Corporation
          TRW        TRW Credit Data


          Page 7                 GAO/HlUbB@71BR   l&porting   of Student   Loans to Credit   Bummu
Appendix I

Guaranteed Student Loans: Credit Bureau
Reporting Practices by Guaranty Agencies
and Lenders
Figure 1.1:



       GAQ Guaranteed Student Loans


              Credit Bureau Reporting
              Practices by Guaranty
              Agencies ahd Lender%




                      Page El    GAO/HRbW71BR   Reporting   of Student   Loana to Credit Burems
                           Appendix I
                           Guaranteed Student Loans: Credit Bureau
                           Reporting Practices by Guaranty Agencies
                           and Lenders




Figure 1.2:


         GAQ Background

              l   Law requires agencies and
                  lenders to report borrower
                  data to credit bureaus
              l   Purpose is to foster borrower
                  responsibility; reduce defaults
              l   Education required agencies to
                  report to six national bureaus,
                  and lenders must report to
                  one bureau (can be local or
                  national)




                           Page 9                      GAO/HRDW71BR   Reporting   of Student   Loana to Credit   Bureaua
                         Appendix I
                         Guaranteed Student Loans: Credtt Bureau
                         RepmUng Fknctkea by Guarane     Agencies
                         and Lenders




Ffgum 1.3:


        GAQ Objectives

                 Agreed to develop data on:
             l   Compliance with P.L. 99-498
             l   Guaranty agency and lender
                 opinions on the
                 *effectiveness in preventing
                  defaults
                 @impacton obtaining other
                  consumer credit, and
                 *possible changes to program
                  provisions




                         Page 10                      GAO/HED9@71BR   Reporting   of Student   Louur to Cmdit   Bureaua
                           Appendix I
                           Guaranteed Student Lcmm Cm-lit Bureau
                           Reporting Practices by Guaranty Agench
                           and Lendens




Figure 1.4:


         f2m Scope

                  Agreed to obtain data from:
              l   All guaranty agencies
                  l 38 report on behalf of
                    the total 56 agencies
              l   Judgmental sample of 19
                  lenders
                  4ncludes 6 of the top IO
                   loan holders




                           Page 11                    GAO/ERD9@71BB   Reporting   of Student   Loam to Credit   Bureaue
                          Appendix I
                          Guaranteed Student Loans Credit Bureau
                          Reporting Practices by Guaranty Agencies
                          and Lenders




Figure 1.5:



        w         Methodology

              l   Developed two questionnaires
                  aOne for guaranty agencies
                  @Onefor lenders
              @AlI38 agencies responded
              l   18 of 19 lenders responded




                          Page 12                      GAO/HRD9@71BB   Reporting   of Student   Loans to Credit Burema
                           Appendix   I
                           Gumanteed Student Loans Credit Bureau
                           Reporting Practicea by Guaranty Agencies
                           and Lenders




Figure 1.6:



        GAQ Results: Compliance with
            Provisions
              l   All agencies and lenders report
                  to at least one bureau
              l   But only 3 agencies reported
                  to all national bureaus
                  @Mainreason for not reporting
                   was uncertainty on which
                   were national bureaus
              l   More credit bureaus are
                  getting information because
                  of the new requirements




                           Page 13                     GAO/HRDW71BR   Reporting   of Stndent   Loans to Credit   Bureaua
                       Appendix I
                       Guaranteed Student Loane: Credit Bureau
                       Reporting F’racticea by Guaranty Agencies
                       and Lendera




Figure 1.7:



        GAQ Results: Effectiveness in
            Reducing Defaults
              Effect on reducing defaults
                                                 Agencies                          Lenders
              Effect                             (percent)                         (percent)
              Little or none                       13.1                                56
              Some                                 21 .l                              38’9
              Moderate                             21 .l                              27’7
              Great                                18.4                               11’1
                                                                                         .
              Very great                            52                                 00
              No basis to judge                    2111                               16’7
                                                                                         .




                       Page 14                      GAO/HIUMMMlBR   Reporting   of Student   hana   to Credit   Bureaus
-

                       Guaranteed student LiJans credit    Bluea
                       Beportine--b~-t~&encies
                       and Lenders




Figure 1.8:



        GAQ Results:   Impact on Obtaining
              Other Consumer Credit
              Impact on delinquent                            borrowers
                                                          Agencies                 Lenders
              Impact                                      (percent)                (percent)
              Helped greatly                                  26                         00.
              Neither helped                                  26:                        00.
               nor hindered
              Hindered somewhat                           36.8                       66.7
              Hindered greatly                             26                         00
              No basis to judge                           55’4
                                                             .                          .
                                                                                     33’3




                       Page 16                      GAO/BBD~71BR    Reporting   of Stndent   Loana to Credit   Bumam
                                Appendix I
                                GuaranM     Student Loam Credit Bureau
                                Reporting Praetleea by Guaranty Agencies
                                and Lenders




Figure 1.8Continued:



       GM              Results: Impact on Obtaining
                       Other Consumer Credit
             -...-
                       Impact on defaulted borrowers
                                                              Agencies                      Lenders
                       Impact                                 (percent)                     (percent)

                       Neither helped     26.                                                         00.
                        nor hindered
                       Hindered somewhat 31.5                                                         00
                       Hindered greatly  58.0                                                  66'7
                       No basis to judge  7.9                                                  33'3.




                                Page 16                     GAO/HRLN6-71BR   Reporting   of Student    Loans to Credit   Bureaua
                                Appendix   I
                                Guaranteed Student lmuw Credit Bureau
                                Reporting Pnwtks   by Guaranty   Agencies
                                and Lenders




Figure 1.8Continued:


        GAO Results: Impact on Obtaining
            Other Consumer Credit
                       Impact on borrowers who
                       were never delinquent nor
                       in default
                                                            Agencies                        Lenders
                       Impact                               (percent)                       (percent)
                       Helped greatly                             53                           16.7
                       Helped somewhat                           2317                          38.9
                       Neither helped                             53.                           00.
                        nor hindered
                       No basis to judge                         65.7                          44.4




                                Page 17                      GAO/HRB9@71BR   Reporting   of Student   Loans to Cmdit   Bureaus
                                Gtmrmteed   Stadent Loans Credit Bureau
                                Beportine Practicea by Guaranty Agendea
                                and Lenders




Figure   1.9:




          MO            Results: Possible Changes to
                        Current Provisions
                .
                        Both guaranty agencies and
                        lenders
                    @Opposed a change to require
                     deleting a bad credit rating
                     if the debt was made current
                    l   Were more favorable to allow
                        deleting bad credit ratings
                        at their option




                                Page 18                     GAO/HRD9@71BR   Reporting   of Student   Loana to Credit   Bureaua
                        Appendix    I
                        Guaranti        Student Loans Credit Bureau
                        Reportln~~~ Practicea   by Guaranty    Agencies
                        and Lenders




Figure I. 10:



         GAQ Guaranty Agencies: Other Key
             Results
                Most report defaulters within
                45 days after lender is paid




                                                        1 to45days




                         Page 19                          GAO/HRD9@71BR   Reporting   of Student   L.oans to Credit Bureaus
-..
                                Appendix I
                                Guaranteed Student Loane: Credit Burean
                                Reporting Practicea by Guaranty Agendes
                                and Lenders




Figun 1.10Continued:



        w              Guaranty Agencies: Other Key
                       Results

                   l   Most agencies (83.3 percent)
                       report all new defaulters
                   l   Primary reason for those not
                       reporting all defaulters was
                       that they began repaying
                       before the reporting occurred




                                Page 20                     GAO/HRDBO-71BR   Reporting   of Student   Loana to Chdtt   BUNWUJ
                                 Appendix I
                                 Guaranteed Student Lmm Credit Bureau
                                 Reportlug Practices by Guaranty Agencies
                                 and Lenders




Figure 1.10 Continued:



        MO               Guaranty Agencies:                         Other Key
                         Results
                     l   Most report new defaulters to
                         bureaus at least monthly
                         (97.3 percent)
                     l   Most update records submitted
                         to bureaus at least monthly
                         (83.8 percent)




                                 Page 21                     GAO/HRD9@71BR   Reporting of Student Loans to Credit Bureaus
                                     Appendix I
                                     Guaranteed Student Loans: Credit Bureau
                                     Reporting F’mctie  by Guaranty Agendea
                                     and Lendem




Figure 1.10 Continued:


        &QI Guaranty Agencies: Other Key
            Results
                         Most believe the credit bureau
                         reporting provisions improved
                         postdefault collections
                                                                               Percent
                         Little/no                                               26.
                         Moderate
                         Very great                                             15.8
                         No basis to judge                                       26.




                                     Page 22                     GAO/HRDW71BR    Reporting   of Student   Loans   to Credit   Bureaus
                            Appendix I
                            Guaranteed Student Loans: Credit Bureau
                            Reporting Practices by Guaranty Agencies
                            and Lenders




Figure 1.11:


        GAO Lenders: Other Key Results


                   All 18 lenders:
               l   Report all new borrowers
               l   Report their new
                   borrowers monthly
               l   Update borrower records
                   monthly




                            Page 23                      GAO/HRLh9@71BR   Reporting   of Student   Loana to Credit   Bureaus
                                 Appendix I
                                 Guaranteed Student Loam Credit Bureau
                                 Reporting Practices by Guaranty Agencies
                                 and Lenders




Figure 1.11Continued:



       w                Lenders: Other Key Results

                        For the 17 lenders originating
                        student loans
                   l    64.7 percent report the
                        borrowers to credit bureaus
                        within 30 days of
                        disbursement
                   *All report borrowers within
                    60 days




                                 Page 24                      GAO/HRD9@7lBR   Reporting   of Student   Loma   to Credit   Bureaux
                                        Appendix I
                                        Guaranteed Student Loans: Credit Bureau
                                        Reporting Practices by Guaranty Agendas
                                        and Lenders




Figure 1.11Continued:


         GM                  Lenders:        Other Key Results
        --.,-.-         -.   -


                         For the 13 lenders who sell
                         student loans
                    l    All notify borrowers of sales
                         *All borrowers are notified
                          within 30 days
                    l    84.6 percent notify credit
                         bureaus of loan sales
                         081.8 percent notify bureaus
                          within 30 days
                         @Allbureaus are notified
                          within 60 days




                                        Page 26                     GAO/HRD9@71BR   Reporting   of Student   Loana to Credit   BIUWMW
                                      Appendix I
                                      Guaranteed Student Loane: credit Bureau
                                      Reporting Practices by Guaranty Agendes
                                      and Lenders




Figure   1.11 Continued:


          w                Lenders:       Other Key Results

                           For the 13 lenders who
                           purchase student loans
                       l   92.3 percent notify borrowers
                           of loan purchases
                           @Allborrowers are notified
                            within 30 days
                       l   All lenders notify credit
                           bureaus of loan purchases
                           076.9 percent notify the
                            bureaus within 30 days
                           ~All are notified by 60 days




                                      Page 26                      GAO/HRD9@71BR   Reporting   of Student   Lcmm to Credit Bureaua
                                    Appendix I
                                    Guaranteed Student Loam Credit B-n
                                    Reporting Practices by Guaranty Agencies
                                    and Lenders




Figure 1.11 Continued:



         GAQ Lenders: Other Key Results

                         Most lenders update borrower
                         records to show delinquencies
                         within 90 days
                         Days                                            Percent
                         16to30                                                22.2
                         31 to 45                                              33.3
                         46 to 60                                               56.
                         61 to 75                                               56
                         76 to 90                                              11’1
                         Over 90                                               22’2
                                                                                  .




                                    Page 27                      GAO/HRlMO-7lBR   Reporting   of Student   Loans to Credit   Bureaus
                                  Appendix I
                                  Guaranteed Student Lmm Credit Bureau
                                  Reporting Practices by Guaranty Agencies
                                  and Lenders




Figure I.1 1 Continued:



         GAQ Lenders: Other Key Results

                          Opinions vary on whether
                          credit bureau reporting
                          helps prevent delinquencies
                                                                    Percent
                          Little/no                                     56
                          Some                                         38’9
                          Moderate                                     27’7
                          Great                                        11’1
                          No basis to judge                            16’7  l




                                   Page 28
Summ~ of Responsesto GAO Survey of
Guaranty Agencies

             We sent a questionnaire to all the guaranty agencies(38 organizations
             reported on behalf of the 56 agenciesexisting at the time of our survey)
             and received responsesfrom all. The questions were developed primar-
             ily from our review of the legislation and Department of Education regu-
             lations and policy guidance given to the agenciesand lenders.
             Information collected included the number and names of credit bureaus
             to which the respondents were reporting, the frequency of reporting, the
             number of borrowers reported, and whether the respondents disclosed
             credit information to eligible schools.Percentagesshown are “valid” in
             that they correspond to the number of agenciesresponding to the spe-
             cific question. In some cases,questions have been paraphrased for clar-
             ity and conciseness.

             1. What date do you regard as the effective date for fulfilling  the
             credit bureau reporting requirements?    (34 agencies cited specific
             dates, and 4 noted they were unable to answer this question.)


             Effective date                                                  No.             Percent
             a7po~as                                                                              2.9
             07/01/86                                                                             2.9
             07/05/86                                                                             2.9
             07/06/86                                                                             a.9
             oafova                                                            1                  2.9
             10/17/86                                                          4                 11.9
             11/10/86                                                          1                  2.9
             ll/lS/aS                                                          2                  6.0
             12/oo/as                                                          3                  a.9
             12/25/86                                                          1                  2.9
             12;26/86                                                          3                  a.9
             03too/a7                                                          1                  2.9
             03/10/87                                                          6                 17.7
             06/30/87                                                          1                  2.9
             07101ia7
               I   I
                                                                               1                  2.9
             lo/oiia7                                                          1                  2.9
             11/04/87                                                          1                  2.9
             12/26/87                                                          1                  2.9
             ol/oi/aa                                                          1                  2.9
             Totals                                                           34               100.0




             Page 29               GAO/HRD9@7lBR   Reporting   of Student   Loam to Credit   Bureaua
Appendix   II
Summary    of Responses   to GAO Survey of
Guaranty   Agencies




2. Are you currently reporting to the following                    national       credit
bureaus? (38 agencies responded.)


Credit bureau                                                              No.              Percent
Associated Credit Bureau (ACB)                                                9                 23.7
Associated Credit Services (ACS)                                            14                 36.8
Chilton (CHI)                                                               25                 65.8
Credit Bureau, Inc.. of Georaia (CBI)                                       30                 78.9
Trans Union (TN)                                                            26                 66.4
TRW Credit Data (TRW)                                                                          73.7


3. Did you report to the following national credit bureaus before
the legislative requirement?   (38 agencies responded in one or more
categories.


(1) ACB (9 apencies responded.)
                                                                           No.              Percent
Yes                                                                           4                 44.4
No                                                                            5                 55.6
Totals                                                                        9               100.0
(2) ACS (14 agencies responded.)
                                                                           No.              Percent
Yes                                                                           5                 35.7
No                                                                            9                 64.3
TOtal                                                                       14                100.0
(3) CHI (25 agencies responded.)
                                                                           No.              Percent
Yes                                                                         12                  48.0
No                                                                          13                 52.0
Totals                                                                      25                100.0
(41 CBI (30 aaencies resDonded.1
                                                                           No.              Percent
Yes                                                                         14                  46.7
No                                                                          16                  53.3
Totals                                                                      30                100.0




Page 30                         GAO/HRD9O-71BR   Reporting   of Student   Loana to Credit   Bureaua
Appendix   II
Summary    of Responses   to GAO Survey of
Guaranty   Agencies




(5) TRU (26 agencies responded.)
                                                                          No.               Percent
Yes                                                                        15                   57.7
No                                                                         11                   42.3
Totals                                                                     26                 100.0
(6) TRW (26 aqencies responded.)
                                                                          No.               Percent
Yes                                                                        17                  60.7
No                                                                         11                  39.3
Totals                                                                     28                 100.0


4. How many of the six national credit bureaus                    are you reporting
to? (As of the date survey was completed.)


                                                                          No.               Percent
All SIX                                                                     3                    7.9
Some, but not all                                                          34                   89.5
None                                                                        1                    2.6
Totals                                                                     38                 100.0


5. For what reason(s) are you not reporting to one or more of the
six national credit bureaus? (35 agencies responded.)


Reason                                                                    No.               Percent
Bureau unable to handle                                                      5                  14.3
Bureau required automated data                                               4                  11.4
Problems with comouter interface                                             5                  14.3
Record layouts differed                                                      3                   8.6
DIscussIons have delayed reporting                                           5                  14.3
Other                                                                       25                  71.4


6. Were your submissions to the credit bureau(s) as of September
30,1988, in machine-readable  form? (37 agencies responded.)


                                                                          No.               Percent
Yes                                                                         27                  73.0
No                                                                          10                  27.0
Totals                                                                      37                100.0




Page 31                        GAO/HRIMO-71BR   Reporting   of Student   L.oans to Credit   Bureaus
Appendix    II
Sumnary     of Responses   to GAO Survey of
Guaranty    Agencies




7. As of September 30,1988, how many defaulters in your portfolio
were being reported to a credit bureau(s)? (34 agencies responded.)


Defaulters                                                                   No.             Percent
1,---
 .ooo-4.999
       ,---                                                                    5                 14.7
5,000-9,999                                                                    6                 17.6
lO,ooo-19,999                                                                  6                 17.6
20,000-49,999                                                                  6                 17.6
50,000-99,999                                                                  5                 14.7
100,000-199,999                                                                2                  5.9
200,000~299,999                                                                2                  5.9
300,000-399,999                                                                2                  5.9
Totals                                                                        34                 99.9
Note. Numbers do not add due to rounding.


8. How soon after paying the lender’s claim do you report                             the
defaulter to each credit bureau? (37 agencies responded.)


No. of days                                                                 No.              Percent
1 to 45                                                                       31                 83.8
46 to 90                                                                       4                 10.8
91 to 145                                                                      2                  5.4
Totals                                                                        37               100.0


9. Do you report borrowers who defaulted (1) both before and after
the credit bureau requirements  or (2) only after the requirements
became effective? (37 agencies responded.)


When reported                                                               No.              Percent
Both before and after                                                        36                  97.3
Only after                                                                    1                   2.7
Totals                                                                       37                100.0




Page 32                         GAO/IiRD9lI71BR   Reporting   of Student   Loans to credit   Bureaus
Appendix   II
Summary    of Responses   to GAO Survey of
Guaranty   Agencies




10. Do you report your entire portfolio      of defaulters regardless                         of
the claim paid date; i.e., “full file” reporting? (36 agencies
responded.)


                                                                          No.               Percent
Yes                                                                                            77.8
No                                                                           8                 22.2
Totals                                                                      36                100.0


11. How old is the oldest claim in your portfolio                   that you do report?
(8 agencies responded.)


Years                                                                      No.              Percent
1                                                                            1                 12.5
3                                                                            1                 12.5
4                                                                            1                 12.5
5                                                                            1                 12.5
6                                                                            1                 12.5
8                                                                            1                 12.5
10                                                                           2                 25.0
Totals                                                                       6                100.0


12. How often do you report              new defaulters       to each bureau?
(37 agencies responded.)


Frequency of reporting                                                     No.              Percent
Weeklv                                                                       3                      8.1
SemImonthly                                                                  2                      5.4
Monthly                                                                     31                     838
Other                                                                        1                      2.7
Totals        -                                                             37                100.0




 Page 33                        GAO/HRIHO-71BR   Reporting   of Student   Loans to Credit   Bureaus
Appendix   II
Summary    of Responses   to GAO Survey of
Guaranty   Agencies




13. How often do you update credit bureau records of those default-
ers you have previously reported? (37 agencies responded.)


Frequency of reporting                                                    No.       No. Percent
Weekly                                                                      1                  2.7
Monthly                                                                    30                 81.1
Other                                                                       6                 16.2
Totals                                                                     37                100.0


14. Do you report          all new defaulters    to a credit bureau(s)?             (37 agen-
cies responded.)


                                                                          No.              Percent
Yes                                                                        31                 83.8
No                                                                          6                 16.2
Totals                                                                     37                log.0


16. About what percent of new defaulters do you generally report
to a credit bureau(s) each time you report? (6 agencies responded.)


Percent of new defaulters                                                 No.              Percent
25                                                                           1                16.7
71                                                                           1                16.7
75                                                                           1                16.7
80                                                                           1                16.7
85                                                                           1                16.7
90                                                                           1                16.7
Totals                                                                       6               100.2
Note, Numbers do not add due to rounding




Page 34                         GAO/HRD9&7lBR   Reporting   of Student   Loana to Credit   Bureaue
Appendix   II
z          ~~ayes      to GAO Survey of




16. For what reasons have you not reported all new defaulters?
(6 agencies responded in one or more categories.)


Reason                                                                       No.             Percent
Reporting is used as a bargaining tool to obtain
  repayment                                                                    2                 33.3
Repayment occurs before reporting is done                                      5                 83.3
Too costly to report all                                                       2                 33.3
Computer system precludes reporting all                                        3                 50.0
Other                                                                          3                 50.0


17. Do you disclose credit information to eligible schools concern-
ing defaulted borrowers who attend or have previously     attended
that school?


                                                                             No.             Percent
Yes                                                                           34                 89.5
No                                                                             4                 10.5
Totals                                                                        36               100.0


18. What types of information              do you report         to these schools?
(34 agencies responded.)


Data reDorted                                                                No.             Percent
Loan total and balance                                                        17                 50.0
Default and repayment data                                                    17                 50.0
Cancellation date upon repayment                                              20                 58.8
Date of oavment bv Education                                                  13                 38.2
Other                                                                         17                 50.0


19. Do you routinely  provide this credit                 information         to any of your
schools? (34 agencies responded.)


                                                                             No.             Percent
Yes                                                                           24                 70.6
No                                                                            10                 29.4
Totals                                                                        34               100.0




Page 35                      GAO/HRIHO-7lBR        Reporting   of Student   Loam to Credit   Bureaus
Appendix   II
Summary    of Responses   to GAO Survey   of
Guaranty   Agencies




20. To about what percent of your schools do you routinely                             provide
credit information? (24 agencies responded.)


Percent of schools                                                         No.              Percent
Less than 25                                                                 2                   8.3
26 to 75                                                                     0                   0.0
76 to 99                                                                     2                   8.3
100                                                                         20                  83.4
Totals                                                                      24                100.0


21. What effect do you believe the credit bureau reporting require-
ments have had on preventing   defaults on the loans you have
guaranteed?


Effect                                                                     No.              Percent
Little or no                                                                 5                  13.1
Some                                                                         8                  21.1
Moderate                                                                     8                  21.1
Great                                                                        7                  18.4
Very great                                                                   2                   5.2
No basis to judge                                                            8                  21.1
Totals                                                                      38                100.0


22. What effect do you believe the credit bureau reporting                           require
ments have had on improving your postdefault    collection                          efforts?


Effect                                                                     No.              Percent
Little or no                                                                 1                  2.6
Some                                                                         7                 18.4
Moderate                                                                    11                 28.9
Great                                                                       12                 31.7
Very great                                                                   6                 15.8
No basis to judge                                                            1                  2.6
Totals                                                                      38                100.0




Page 36                        GAO/ERD-96-71BR   Reporting   of Student   Loans to Credit   Bureaus
Appendix   II
Summary    of Responses   to GAO Survey of
Guaranty   Agencies




23. What has been the effect on the ability of the following kinds of
student borrowers to obtain additional    consumer credit as a result
of the credit bureau reporting requirements?


(1) On students who have been delinquent but have not defaulted
Effect                                                                    No.              Percent
Helped greatly                                                               1                  2.6
Neither helped nor hindered                                                  1                  2.6
Hindered somewhat                                                           14                 36.8
Hindered Qreatly
No basis to judge                                                          21                  55.4
Totals                                                                     38                100.0
(2) On student borrowers who have defaulted
Effect                                                                    No.              Percent
Neither helped nor hindered                                                 1                   2.6
Hindered somewhat                                                          12                  31.5
Hindered areatlv                                                           22                  58.0
No basis to judge                                                           3                   7.9
Totals                                                                     38                100.0
(3) On student borrowers who have neither been delinquent nor defaulted
Effect                                                                    No.              Percent
HelDed clreatlv                                                             2                   5.3
Helped somewhat                                                             9                  23.7
Neither helped nor hlndered                                                 2                   5.3
No basis to iudae                                                          25                  65.7
Totals                                                                     38                100.0


24. Indicate whether           you believe the following changes should be
made to the existing           credit bureau reporting requirements.


(1) Reduce the number of national credit bureaus to which agencies must report?
 (37 aaencies resD0nded.j
                                                                          No.              Percent
Yes                                                                         23                 62 2
No                                                                          14                 37.8
Totals                                                                     37                100.0




Page 37                        GAO/HRD-9&71BR   Reporting   of Student   Loans to Credit   Bureaus
(2) Add the reauirement to rewrt to one or more local credit bureaus?
                                                                              No.              Percent
Yes                                                                             6                 15.8
No                                                                             32                 84.2
Totala                                                                         38                100.0
(3) Require reporting only if a defaulter fails to enter repayment quickly? (37 agencies
responded.)
                                                                              No.              Percent
Yes                                                                             9                 24.3
No                                                                             28                 75.7
Totals                                                                         37                100.0
(4) Require deleting the bad credit rating if the account is subsequently      paid in full?
(36 aaencies reswnded.)
                                                                              No.              Percent
Yes                                                                             6                  16.7
No                                                                             30                 83.3
Totala                                                                         36                100.0
(5) Allow deleting a bad credit rating at the option of the guaranty agency if the account is
subsequently paid in full?
                                                                         No.            Percent
Yes                                                                       26                68.4
No                                                                         12               31.6
                                                                               38                100.0
(6) Other?
                                                                              No.              Percent
Yes                                                                             4                  10.5
No                                                                             34                  89.5
Totals                                                                         38                loo.0
Note: In general, the “other” changes suggested referred to standardizing reporting formats among the
credit bureaus or judgmentally deleting a bad credit rating at the borrower’s request.




P8ge 38                        GAO/EIUhgG71BR       Reporting   of Student   Loam to Credit BIUWM
Summaxy of Responsesto GAO Survey of
Lending Institutions

              For the lender questionnaire information, we agreed to judgmentally
              select a sample of 19 lenders, 18 of which responded. The respondents
              included 6 of the 10 largest holders of student loans, 1 of which is the
              Student Loan Marketing Association, the largest holder of Stafford
              loans.
              The questions were developed primarily from our review of the legisla-
              tion and Department of Education regulations and policy guidance given
              to the agenciesand lenders. The information collected included the
              number and names of credit bureaus to which the respondents were
              reporting, the frequency of reporting, the number of borrowers
              reported, and whether the respondents disclosed credit information to
              eligible schools.All percentagesshown are “valid” in that they corre-
              spond to the number of institutions responding to each question. In some
              cases,questions have been paraphrased for clarity and conciseness.
              1. Are you reporting    to at least one credit bureau?


                                                                                 No.             Percent
              Yes                                                                 18               100.0


              2. How many credit bureaus       do you report       to?


              No. of credit bureaus                                              No.             Per&t
              1                                                                    2                 11.1
              2                                                                    2                 11.1
              3                                                                    6                 33.3
              4                                                                    4                 22.2
              5                                                                    3                 16.7
              6                                                                    1                  5.6
              TOtdO                                                               18               100.0


              3. Identify   reasons for not reporting     borrower       information       to credit
              bureaus.

              Note: None of the respondents answered this question becauseit was
              skipped if the respondent was reporting to at least one credit bureau.




              Page 39                  GAO/ElUMHUlBR    Report&j   of Student   Loam to Credit   Bureaus
Appendix III
Summary of Responses to GAO Survey    of
Lending institutions




4. What date do you regard as the effective                date of the credit
bureau reporting requirements?


Effective date                                                           No.           Percent
04107186                                                                   1                5.6
09/01/06                                                                   1                5.6
10/01/06                                                                   1                5.6
10/03/86                                                                   1                5.6
10/06/86                                                                   1                5.6
10;17;86                                                                   3               16.7
11/00/86                                                                   1                5.6
12/01/06                                                                   2               11.1
12126186                                                                   1                5.6
01/01/87                                                                   1                5.6
03110187                                                                   3               16.7
07/01/87                                                                   1                5.6
10/01/87                                                                   1                5.6
Totals                                                                    18              100.0


6. Identify the number of credit bureaus you reported borrower
information   to before and after the requirements. (18 lenders
responded.)


                                                                          Number of bureaus
When reported                                                             lenders reported to
Before requirements                                                                          34
After reauirements (additional)                                                              27
Totals                                                                                       61


6. Do you originate         student   loans?


                                                                         No.           Percent
Yes                                                                       17                94.4
No                                                                         1                 5.6
Total                                                                     18              100.0




Page 40                       GAO/-SO-71BR     Reporting   of Student   Loans to Credit Bureaus
Appendix III
Summary of Responses   to GAO Survey of
Lending Institutions




7. How soon after disbursement   do you report                   borrowers          to each
credit bureau? (17 lenders responded.)


No. of days                                                                 No.              Percent
1to15                                                                         1                  5.9
16to30                                                                       10                 58.8
31 to45                                                                       5                 29.4
46to 60                                                                       1                  5.9
Totals                                                                       17                100.0


8. Do you sell student        loans to other institutions?                (17 lenders
responded.)


                                                                            No.              Percent
Yes                                                                          13                 76.5
No                                                                            4                 23.5
Totals                                                                       17                100.0


9. Do you notify       the borrower       of the sale? (13 lenders             responded.)


                                                                            No.              Percent
Yes                                                                          13                 100.0


10. How soon after the sale do you notify                   the borrower?         (13 lenders
responded.)


No. of days                                                                 No.              Percent
1to15                                                                        11                  84.6
16to30                                                                        2                  15.4
Totals                                                                       13                100.0




Page 4 1                     GAO/HRD-SO-71BR    Reporting    of Student    Loans to Credit   Bureaus
Appendix IlI
Summary of Responses   to GAO Survey of
Lending lnstitutious




11. Do you notify       the credit bureau(s)      of the sale? (13 lenders
responded.)


                                                                         No.              Percent
Yes                                                                       11                 84.6
No                                                                         2                 15.4
Totals                                                                    13                100.0


12. How soon after the sale do you notify                 the credit bureau(s)?            (11
lenders responded.)


No. of days                                                              No.              Percent
16to30                                                                      9                81.8
31to45                                                                      1                 9.1
46 to60                                                                     1                 9.1
Totals                                                                    11                100.0


13. Do you purchase         student    loans from other institutions?


                                                                         No.              Percent
Yes                                                                       13                  72.2
No                                                                         5                  27.8
Totals                                                                    18                100.0


14. Do you notify       the borrower      of the purchase?         (13 lenders
responded.)


                                                                         No.              Percent
Yes                                                                        12                 92.3
No                                                                          1                  7.7
Totals                                                                    13                100.0




Page 42                      GAO/HRlW@71BR    Reporting    of Student   Loans to Credit   Bureaus
Appendix III
Summary of Responses to GAO Survey of
Lending Institutions




16. How soon do you report         the purchase           to borrowers?          (12 lenders
responded.)


No. of days                                                               No.              Percent
1to15                                                                       9                  75.0
16to30                                                                      3                  25.0
Totals                                                                     12                100.0


16. Do you notify     credit bureaus        of the new account?             (13 lenders
responded.)


                                                                          No.              Percent
Yes                                                                        13                100.0


17. How soon do you report         the purchase           to credit bureaus?          (13
lenders responded.)


No. of days                                                               No.              Percent
16to30                                                                     10                  76.9
31 to45                                                                     1                   7.7
46to 60                                                                     2                  15.4
Totals                                                                     13                100.0


18. Do you update the borrower’s             record with the credit bureau                   to
show a delinquency?


                                                                          No.              Percent
Yes                                                                         18                100.0




Page 43                    GAO;HRIMO-71BR     Reporting     of Student   Loans to Credit   Bureaus
Appendix Ill
Summary of Responses    to GAO Survey of
Lending Institutions




19. How many days delinquent   must a borrower                    be before you
report the delinquency to the credit bureau?


No. of days                                                             No.               Percent
16to30                                                                    4                   22.2
31 to45                                                                   6                   33.3
46 to 60                                                                  1                    5.6
61 to 75                                                                  1                    5.6
76 to 90                                                                  2                   11.1
Over 90                                                                   4                   22.2
Totals                                                                   18                 100.0


20. Did    you report borrowers whose loans were originated/      pur-
chased     (a) both before and after the credit bureau requirements
became      effective or (b) only after the credit bureau requirements
became      effective?


                                                                        No.               Percent
Both before and after                                                    17                   94.4
Onlv after                                                                1                    5.6
Totals                                                                   18                 100.0


21. Do you report your entire portfolio      of borrowers, regardless                       of
the age of the loans; i.e., “full-file” reporting? (17 lenders
responded.)


                                                                        No.               Percent
Yes                                                                      17                  100.0




Page 44                      GAO/HRD-!W71BR   Reporting   of Student   bans   to Credit   Bureaus
Appendix III
Summary of Responses    to GAO Survey of
Lending Instiitutions




22. How old is the oldest loan in your portfolio?

Note: None of the lenders answered this question becauseit was to be
skipped if the respondent answered “yes” to question 21.
23. How often do you report            new accounts       to each credit bureau?


                                                                        No.              Percent
Monthlv                                                                  18                100.0


24. How often do you update records of borrowers                       you have previ-
ously reported?


                                                                        No.              Percent
Mnnthlv                                                                  18                100.0


25. As of September 30,1988, how many borrowers                        were in your
portfolio? (17 lenders responded.)


No. of borrowers                                                        No.              Percent
1-9.999                                                                   1                  5.9
10,000-49.999                                                             5                 29.4
50,000-99,999                                                             4                 23.5
100.000-299.999                                                           3                 17.6
300.000-499.999                                                           1                  5.9
500,000-l milllon                                                         2                 11.8
Over 1 million                                                            1                  5.9
Totals                                                                   17                100.0


26. Do you report        all new accounts     to the credit bureau(s)?


                                                                        No.              Percent
Yes                                                                       18                100.0




Page 45                       GAO/HRD9@71BR   Reporting   of Student   Loans to Credit   Bureaus
Appendix Ill
Summary of Reaponees to GAO Survey of
Lending Institutions




27. What percent of new accounts           do you report        to the credit
bureaus each time you report?

Note: None of the lenders answered this question becauseit was to be
skipped by those who answered “yes” to question 26.
28. What are the reasons you have not reported                  all new borrowers?

Note: None of the lenders answered this question becauseit was to be
skipped by those who answered “yes” to question 26.
29. Do you disclose credit information   to eligible schools concem-
ing delinquent  borrowers either currently   or previously  attending
the school?


                                                                       No.           Percent
Yes                                                                          4            22.2
No                                                                          14            77.8
Totals                                                                      18          100.0


30. What kinds of information           do you disclose      to the schools? (4
lenders responded.)

                                                                     * .-
Date reported                                                          NO.           Percent
Loan total and balance                                                       3           75.0
Dellnauencv and reoavment data                                               4          100.0
Default and repayment
                 .     data                                                  3           75.0
Cancellatton date upon repayment                                             3           75.0
Date of oavment bv Education
          I   ,   ,
                                                                             3           75.0
Other                                                                        1           25.0




Page 46                    GAO/HRMW’IlBB    Reporting   of Student   Loans to Credit Bureaur,
Appendix III
Summary of Responses    to GAO Survey   of
Lfmding Institutions




31. Do you routinely  provide any of this credit                 information         to any
of your schools? (4 lenders responded.)


                                                                          No.              Percent
Yes                                                                          1                 25.0
No                                                                          3                  75.0
Totals                                                                      4                 100.0


32. To about what percent of your schools do you provide                           credit
information?  (1 lender responded.)


                                                                          No.              Percent
100 oercent                                                                  1                100.0


33. What has been the effect of credit bureau                   reporting        on prevent-
ing delinquencies on the loans you hold?


Effect                                                                    No.              Percent
Little or no                                                                 1                  5.6
Some                                                                         7                 38.9
Moderate                                                                     5                 27.7
Great                                                                        2                 11 1
No basis to judge                                                            3                 16.7
Totals                                                                      18                100.0


34. What has been the effect of credit bureau                   reporting        on prevent-
ing defaults on the loans you hold?


Effect                                                                    No.              Percent
Little or no        -                                                        1                   5.6
Some                                                                         7                  38.9
Moderate                                                                     5                  27.7
Great                                                                        2                  11 1
No basis to judge                                                            3                  16.7
Totals                                                                      18                100.0




Page 47                       GAO/HR.WJO-7lBR   Reporting   of Student   Loans to Credit    Bureaus
Appendix Ill
Summary of Responses   to GAO Survey of
Lending Institutions




35. What has been the effect on the ability of the following kinds of
student-borrowers   to obtain additional  consumer credit as a result
of the credit bureau reporting requirements?


(1) On borrowers who have been delinquent, but have not defaulted
Effect                                                                     No.          Percent
Hindered somewhat                                                            12               66.7
No basrs to iudae
Totals                                                                       18            100.0
(2) On borrowers who have defaulted
Effect                                                                      No.         Percent
Hindered areatlv                                                             12               66.7
No basis to judoe                                                             6               33.3
Totals                                                                       18            100.0
(3) On borrowers who have neither been delinquent nor defaulted
Effect                                                                      No.         Percent
Helced areatlv                                                                3               16.7
Helped somewhat                                                               7               38.9
No basis to judge                                                             8               44.4
Totals                                                                       18            100.0


36. Indicate whether you believe the following changes                            should be
made to the credit bureau reporting requirements.


(1) increase the number of credit bureaus to which lenders must report?
                                                                      No.               Percent
Yes                                                                      2                    11.1
No                                                                      16                    88.9
Totals                                                                  18                 100.0
(2) Require lenders to report to at least one national credit bureau?
                                                                            No.         Percent
Yes                                                                          16               88.9
No                                                                            2               11.1
Totals                                                                       18            100.0
(3) Require reporting only If the borrower becomes delinquent?
                                                                            No.          Percent
Yes                                                                           4               22.2
No                                                                           14               77.8
Totals                                                                       18            100.0




Page 48                       GAO/HRINW71BR       Reporting   of Student   Loam to Credit Bureaus
Appendix     III
Summary      of Responses   to GAO Survey of
Lending    hStitUtiOM




(4) Reauire deletina the bad credit ratina if the account is subseauentlv         made current?
                                                                                 No.          Percent
Yes                                                                                2              11 1
No                                                                                16              88.9
Totals                                                                            18                100.0
(5) Allow deleting the bad credit rating at the lender’s option if the account is subsequently
made current?
                                                                           No.           Percent
Yes                                                                                9                 50.0
No                                                                                 9                 50.0
Totals                                                                            18                100.0
(6) Other?
                                                                                 No.              Percent
Yes                                                                                1                   5%
No                                                                                17                  94.4
Totals                                                                            18                100.0
Note: The lender that responded “yes” to the “other”   questlon suggested a change to standardze
credit bureau reportmg formats




Page 49                          GAO/HRD9@71BR         Reporting   of Student   Loans to Credit   Bureaus
Major Contributors to This Report


                        Joseph J. Eglin, Assistant Director, (202) 246-9623
Human Resources         Christopher C. Crissman, Evaluator-in-Charge
Division, Washington,   Joan A. Denomme,Evaluator
DC.                     Erwin W. Ekdarf, Social ScienceAnalyst
                        Joan K. Vogel, Evaluator (Computer Specialist)




                        Page 60               GAO/IiRD9@71BR   Reporthg   of Stawlent bmm   to Chdit   Bamams
Page 51   GAO/ERD~7lBE   Reporting   of Stndent   LCUUWto Credit BUIWMIE
Related GAO Products


              Supplemental Student Loans: Who Are the Largest Lenders?(GAO/
                       Feb. 21,199O).
              HRD~O-721q


              GAO Views on the Stafford Student Loan Program (GAO/T-HRD-~13,                     Feb.
              20,199O).
              Supplemental Student Loans: Who Rorrows and Who Defaults (GAO/
              HRDQO-33~s, Oct. 17,1989).
              Guaranteed Student Loans: Analysis of Student Default Rates at 7,800
              PostsecondarySchools(GAO/HRD-S~~~BR,  July 5,1989).

              Defaulted Student Loans: Preliminary Analysis of Student Loan Rorrow-
              ers and Defaulters (GAOflRD-88112BR, June 14, 1988).
              GAO'S Views on the Default Task Force’s Recommendationsfor Reducing
              Default Costs in the Guaranteed Student Loan Program (GAO/T-~~~-88-7, -
              Feb. 2, 1988).

              Guaranteed Student Loans: Potential Default and Cost Reduction
              OptiOnS(GAO/HRD8&52BR, Jan. 7, 1988).
              Guaranteed Student Loans: Analvsis of Insurance Premiums Charned
                                                                           v bvw
              Guaranty Agencies (GAOPIRD-WI~BR,  Oct. 7,1987).

              Guaranteed Student Loans: Legislative and Regulatory ChangesNeeded
              to ReduceDefault Costs CGAO/HRDS7-76. &Dt. 30.1987).
              Defaulted Student Loans: Private Lender Collection Efforts Often Inade-
              quate (G~oj~RD87-48, Aug. 20,1987).

              Defaulted Student Loans: Guaranty Agencies’ Collection Practices and
              Procedures(GAOmRDW114BR,    July 17,1986).




(104612)      Page 52                GAO/IiRD9@71BR   Reporting   of Student   Loans to Credit   Bureaus
Requests     for copies    of   GAO   reports   should   be sent to:

U.S. General Accounting           Office
Post Office Box 6015
Gaithersburg,  Maryland           20877

Telephone     202-275-6241

The first five    copies   of each report        are free. Additional     copies    are
$2.00 each.

There    is a 25”o discount      on orders      for 100 or more copies     mailed     to a   ’
single   address.

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out to the Superintendent           of Documents.