Defaulted Student Loans

GAO provided information regarding the characteristics of borrowers and defaulters in the Department of Education's Guaranteed Student Loan program.

GAO found that: (1) loans guaranteed through 1987 totalled over $70 billion, with outstanding student debt almost doubling during the last 5 years; (2) during the same 5-year period, defaults increased by 276 percent, with federal default claims amounting to about $1.3 billion in 1987; and (3) of approximately 1.18 million borrowers who obtained their last guaranteed loan in 1983, over 228,000, or about 18 percent, had defaulted as of September 1987. GAO also found that: (1) default rates varied according to borrowers' family-income levels, the type of school attended, the number of years attended, and the degree of financial independence; (2) students enrolled at vocational schools, financially independent, and attending school for 1 year or less had default rates of 35 percent, 28 percent, and 33 percent, respectively; and (3) students attending 2- and 4-year schools, receiving family financial assistance, and attending school for more than 1 year had default rates of 12 percent, 15 percent, and 11 percent, respectively.