The Federal Student Financial Assistance (SFA) programs are administered by the Office of Postsecondary Education within the U.S. Department of Education. These programs provide funds to help borrowers meet postsecondary education costs. Often referred to as "Title IV programs" because the authorizing legislation is written in Title IV of the Higher Education Act, SFA programs include loans, grants, and work-study programs. SFA programs include Federal Pell Grants, Federal Perkins Loans, Supplemental Educational Opportunity Grants (SEOG), the College Work-Study Program, the Federal Family Education Loan (FFEL) program, and the William D. Ford Federal Direct Student Loan Program (FDLP).
The Data Book focuses on two of the SFA programs, the FFEL program and the FDLP. These two programs are of particular interest because they are structured as "entitlement" programs. Under the FFEL program, the entitlements accrue to lenders and guaranty agencies, while under the FDLP, entitlements accrue to individual borrowers. This special status as an "entitlement" program explains some of the spectacular growth of the FFEL program and the FDLP.
While the FFEL program began in FY66 and the FDLP began in FY94, both programs have grown rapidly. The quantitative data that have been assembled in the Data Book reflect this growth and are of interest to state officials, Congress, Federal officials, postsecondary educational institutions, guaranty agencies, lenders, parents, students, researchers, and policymakers.
The FFEL program was known formerly as the Guaranteed Student Loan (GSL) program. The GSL program, originally authorized in the Higher Education Act of 1965, empowered state and private non-profit agencies to guarantee student loans and to establish loan insurance for lenders who did not have access to state or private non-profit agencies. The GSL program, renamed the FFEL program in the Higher Education Amendments of 1992, has experienced enormous growth since FY86.
The Federal Direct Loan Demonstration Program was first authorized by the Higher Education Amendments of 1992 as a pilot program. This program, which eventually became the FDLP, was designed to improve the delivery of loans to postsecondary students in need of financial assistance. The FDLP, authorized by the Student Loan Reform Act of 1993 as part of the Omnibus Reconciliation Act of 1993, has grown rapidly in the short time it has been operational.
In order to understand the data presented in this publication, it is important to know that the FFEL program and the FDLP comprise the same loan programs: the Federal Stafford Loans (Subsidized and Unsubsidized) and Parent Loans to Undergraduate Students (PLUS) loans. The Stafford Subsidized loan is awarded on the basis of the borrower's financial need while the Stafford Unsubsidized loan is not based on need. The PLUS loan is designed for parents who take out loans on behalf of dependent students. In addition, both the FFEL program and FDLP offer Consolidation loans. It is important to note that the Supplemental Loan to Students (SLS) program, established in 1981 under the FFEL program, was replaced by the FFEL Stafford Unsubsidized loan program in FY94. Thus, the SLS program, while previously a component of the FFEL program, has never been a component of the FDLP.
Although the FFEL program and the FDLP share similar program components, each disburses funds differently. FFEL program loans are made through private lenders while FDLP loans are disbursed directly from the U.S. government to postsecondary institutions. Eligible postsecondary institutions may choose to provide borrowers access to federally supported loans through the FFEL program or the FDLP, but not both.
Recent legislative activities have had a tremendous impact on both loan programs. The Higher Education Amendments of 1992 changed the FFEL program components by setting new loan limits, replacing fixed interest rates on Stafford loans with variable rates, and requiring origination fees for PLUS and SLS loans. Another example of legislation that has shaped and developed both programs is the Omnibus Budget Reconciliation Act of 1993. This act 1) established the current FDLP, setting target goals for phase-in over a 5-year period and provided cost reduction measures to the FFEL program, and 2) set maximum rates for various FFEL program fees, rates, and reimbursements. Interested readers are encouraged to reference the legislative history section in appendix II of this book for additional information.
The data assembled for this edition of the Data Book are from various sources. The primary source is the U.S. Department of Education, Office of Postsecondary Education, National Student Loan Data System (NSLDS), a live database of loan volume records. Other data have been assembled from data collected through the ED form 1189, ED form 1130, ED Form 799, Direct Loan/Loan Origination System, U.S. Department of Treasury, Sallie Mae Annual Report, and Guarantor and Lender Oversight Service (GLOS) Records.
It is important to note that data for the FDLP are limited to 3 fiscal years (FY94–FY96). All other loan programs are clearly marked to indicate the time period in which the program was operational. Where data is not available, a notation appears in the footnote.
Loan volume commitments (dollars and loans) represent commitments by guaranty agencies for the FFEL program. For the FDLP, loan volume commitments (dollars and loans) are listed by state. The publication presents FFEL program and FDLP data by program component (loan program) and as a FFEL program total or FDLP total. Electronic copies of the data presented in these tables will be available through the Web site at http:// www.ed.gov/offices/OPE/PPI. The paper version is available by calling 1-800-4FED-AID (1-800-433-3243).
The Office of Policy, Planning and Innovation publishes data on other Title IV programs. Information on the Pell Grant Program can be found in the Title IV Federal Pell Grant Program End of the Year Report and information on the campus-based programs (Perkins Loans, College Work Study and the SEOG program) can be found in the Federal Campus Based Programs Data Book 1997.
Between FY94–FY96, there was a large increase in borrowing through the combined FFEL program and the FDLP, the two SFA programs that are the focus of this Data Book. As illustrated in the graph below, increases in the FDLP loan volume during FY95 and FY96 resulted in decreases in the FFEL program loan volume.
The impact of the FDLP upon the FFEL program volume was greatest in FY95 and FY96. The FDLP, which began in FY94, had minimal impact on the FFEL program volume in FY94. In this year, there were several restrictions placed on the FDLP. The overall decrease in the FFEL program volume and subsequent increase in FDLP volume is shown in the summary tables presented throughout this book.
In summary, the total combined dollar volume commitments from both the FFEL program and the FDLP were approximately $24.0 billion in FY94, a 25.5 percent increase from FY93. The combined commitments increased again in FY95 to $26.1 billion, an increase of 8.7 percent. Finally, the combined dollar volume commitments increased to $29.1 billion in FY96, a 10.5 percent increase from FY95. The combined loan commitments also increased, rising from 7.0 to 8.0 million in FY94–FY96. The number of FFEL program and FDLP loans increased 18.7, 2.9, and 10.0 percent in FY94–FY96, respectively.
Data Book Organization
The Loan Programs Data Book is organized to facilitate readers who want summary information and/or detailed program information. The core of the volume consists of 60 tables, text summarizing the highlights of the data in each table, and graphs or charts, as required to assist readers. This edition also contains a legislative history of the FFEL program and a glossary of nearly 100 terms.
The 60 tables and companion text are organized into four sections:
- FFEL Program and FDLP Summary Information (Tables 1-3)
- FFEL Program and FDLP Loan Volume Commitments (Tables 4-35)
- FFEL Program Dollars Outstanding and Guaranty Agency Characteristics (Tables 36-42)
- FFEL Program and FDLP Defaults and Collections (Tables 43-60)
The information contained in each table is arranged in the following sequence:
- Text summarizing data highlights
- Table of data
- Graphs (as required)
When data are available for FFEL programs in existence prior to FY86, the entire data set is presented in a corresponding table that appears in appendix I. Since some FFEL programs began more than 30 years ago, this cumulative data serves as a historical accounting of FFEL program activity.