United States Department of Education
Dear Customers and Colleagues:
Fiscal year 1995 was a period of significant achievement for the Department of Education. We are proud of accomplishments in education programs, all of which demonstrate a strong emphasis on accountability for results and maximum flexibility in implementation. This vision of the Federal role recognizes that education is a national priority and a state responsibility under local control. Minimum regulation and maximum latitude define the Education Department's partnership with states and local communities and are the elements of success for a number of new programs.
The William D. Ford Federal Direct Loan Program simplifies and streamlines the Department's support for postsecondary education by making the loan process easier for schools and students. The new program provides a variety of repayment options. Along with changes in the older guaranteed loan program, direct lending is expected to save the taxpayers money, while providing better service to students and educational institutions.
The national cohort default rate in the Federal Family Education Loan Program dropped to an all-time low since reporting began. The cohort default rate has been cut almost in half, from 22.4 percent three years ago to 11.6 percent in the most recent year. The new cohort default rate is from fiscal year 1993, the most recent data available, representing borrowers scheduled to begin loan payments in fiscal year 1993 who defaulted either in that year or the following. The dramatic decline in default rates is coupled with an equally impressive rise in defaulted loan collections. Total collections for fiscal year 1995 were $2 billion; the Department's collections alone have increased fivefold since fiscal year 1993. These results are attributable in part to the Department's efforts to improve our accountability and gatekeeping functions.
The School-to-Work initiative jump-starts young people into thinking about their futures, and starting their careers off on the right foot. This program provides Federal seed money to states over a five-year period to get school-to-work programs off the ground. The Federal role is then phased out completely.
Finally, fiscal year 1995 was also a year that saw significant improvements in the management of the Department. The Department's strategic plan reflects our efforts to restructure the Federal role in education, focus on performance, streamline and reduce the number of education programs, and improve internal Department management. The inclusion of performance measures in the strategic plan holds us accountable for results.
There is every reason to be enthusiastic about the future. Education outcomes have been showing promising trends. We look forward to continuing to work hand in hand with states and local communities to serve the Nation's learners.