Student Loan Programs: As Federal Costs of Loan Consolidation Rise, Other Options Should be Examined;Report to the Congress

摘要

The federal government makes consolidation loans available to help borrowers manage their student loan debt. By combining loans into one and extending the repayment period, a consolidation loan reduces monthly repayments, which may lower default risk and, thereby, reduce federal costs of loan defaults. Consolidation loans also allow borrowers to lock in a fixed interest ratean option not available for other student loans and are available to borrowers regardless of financial need. GAO was asked to examine (1) how consolidation borrowers differ from nonconsolidation borrowers; (2) how federal costs have been affected by recent interest rate and loan volume changes; and (3) the extent to which repayment optionsother than consolidationare available to help simplify and reduce loan repayments.