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Guaranteed Student Loans: Actions to Ensure Continued Student Access to Subsidized Loans

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Report Type Reports and Testimonies
Report Date Feb. 24, 1995
Report No. HEHS-95-64
Subject
Summary:

Recent changes to the Federal Family Education Loan Program, formerly the Guaranteed Student Loan Program, as well as the introduction of the Federal Direct Student Loan Program, have raised concerns about whether eligible borrowers will continue to have access to subsidized loans. Many lenders and guaranty agencies expect some eligible students to have difficulty obtaining subsidized Stafford loans during the next few years. Guaranty agencies generally have arrangements to provide loans to these students. The Education Department has arranged with Sallie Mae to make loans to students to whom guaranty agencies cannot provide them. The Department has also arranged with a new agency to serve as a guarantor of last resort if existing guaranty agencies cannot provide guarantees to lenders. Predicting how well these arrangements will ensure access to loans after fiscal year 1995 is difficult, and the issue may need to be revisited later.

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