Direct Student Loans: Additional Steps Would Increase Borrowers' Awareness of Electronic Debiting and Reduce Federal Administrative Costs.

摘要

In November 1999, the Department of Education (Education) began offering a 0.25 percent interest rate reduction under the William D. Ford Federal Direct Loan Program (FDLP) to borrowers who agree to have their monthly loan payments automatically withdrawn from a bank account via its electronic debit account (EDA) program. While borrowers would benefit by paying a reduced interest rate on their loans, the federal government would benefit from receiving fewer late payments. The Higher Education Act of 1965, as amended, requires that such interest rate reductions be cost neutral and in the best financial interest of the Federal Government and that Education offset any higher subsidy costs resulting from the interest rate reduction through reductions in funding for administrative costs.