GAO Investigates Factors Used to Select Private Loan Borrowers
Responding to a requirement in the Higher Education Opportunity Act (HEOA), the Government Accountability Office (GAO) released a report yesterday that summarizes its investigation into how private lenders’ use nonindividual factors — like the cohort default rate or graduation rate of the school the student attends — to make private loan decisions. The GAO said it was unable to obtain information that allowed it to assess the impact of lenders’ use of these factors on students, but it did compile the key characteristics of private education loan borrowers and the types of schools they attend. The GAO also reports on how lenders use nonindividual factors — including cohort default rate, graduation rate, and accreditation — in making lending decisions for private education loans.
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Students dont need to be burdened by loans, but for some students no loan means no education. For most students, it means walking a tightrope balancing the ability to pay off the loan and getting a good education.
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