Skip to main content
  • Click to open or close the program search boxShow Me Programs
    • Show me the programs that are
      performing Go
    • Show me the programs that are
      not performing Go
ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
Program Assessment

Program

View Assessment Details

Federal Family Education Loans

The program provides default insurance and interest subsidies to encourage private lenders to make postsecondary education loans to undergraduate and graduate students. The program also provides interest subsidies for eligible low-income students to cover interest accrued while in school.

Rating

What This Rating Means

PERFORMING
Adequate

This rating describes a program that needs to set more ambitious goals, achieve better results, improve accountability or strengthen its management practices.
  • Overall, the assessment concluded that both this program and the William D. Ford Direct Student Loan program fulfill their purpose of ensuring low- and middle-income students can afford the cost of postsecondary education. The two programs combined provide over $70 billion a year in new loans to students. The programs also have meaningful performance measures and outcome data.
  • The program could be more cost-effective while continuing to meet its goals if it increased lender risk-sharing, used market-based mechanisms to determine subsidy and benefit levels, and employed a more rigorous performance-based compensation framework for Guaranty Agencies.
  • A disproportionate amount of program benefits are provided to borrowers out of school versus students attending school, and statutory loan limits, while increased in some cases by the Higher Education Reconciliation Act, have not kept pace with rising higher education costs.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Reducing unnecessary subsidies to lenders and other program participants.
  • Directing a greater share of borrower benefits to students in school instead of those who have graduated.
  • Developing long-term targets and timeframes for all relevant performance measures through 2010.

Learn More

The content on ExpectMore.gov is developed by the U.S. Office of Management and Budget and Federal agencies.