Student Loans

Of the $13.5 billion in Federal Family Education Loans made in fiscal year 1991, $372 million--less than three percent--went to students attending historically black colleges and universities. The loan default volume at these institutions for fiscal year 1990 was $45 million. Average annual default rates for loans made to students attending historically black colleges and universities ranged from 21 to 27 percent during fiscal years 1987-90. If these default rates remain steady for fiscal years 1990-92, nearly one-third of the 105 historically black colleges and universities will lose their eligibility for the federal loan program in fiscal year 1994. In addition, as many as three-fourths of these institutions could be subject to a state review to determine their continued eligibility for participating in federal student assistance programs.

GAO found that: (1) of the $13.5 billion in FFEL made in 1991, about 3 percent or $372 million went to students attending HBCU; (2) the HBCU default loan volume for 1990 totalled $45 million; (3) between 1987 and 1990, HBCU default rates varied between 21 and 27 percent and accounted for more than 3 percent of all cohort defaults; and (4) about one-third of HBCU may lose their FFEL eligibility in fiscal year 1994 and up to 75 percent of HBCU could be subject to state reviews because of continued high cohort default rates.