Guaranteed Student Loan Program, Commissioner of Higher Education Financial-Compliance Audit for the Fiscal Year Ended .. 1995

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The Omnibus Budget Reconciliation Act of 1993, including the Student Loan Reform Act of 1993, provides that payment of transitional support is dependent upon federal appropriation on an annual basis. For FY95, transitional support reimbursements were calculated as 1% of the total consummated loan guarantees made during the year.
Page A-9 9. COLLECTION COSTS RETAINED When MGSLP collects all or a portion of a defaulted loan reinsured by the federal government, the recovery applied to the reinsure
...d portion of the loan must be forwarded to DE. DE allows MGSLP to retain collection fees from its defaulted loan recoveries equivalent to 27% of the gross recovered amount to cover the costs associated with collecting.
During FY95 MGSLP retained $973,026 from the total recoveries received on loans assigned to the agency. Expenditures for direct collection costs incurred by MGSLP during FY95 were $613,730.
10. SUPPLEMENTAL PRECLAIMS ASSISTANCE MGSLP provides supplemental preclaims assistance (SPA) to lenders holding delinquent student loan notes that are between 120 and 270 days past due.


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