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ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
Program Assessment

Program

View Assessment Details

William D. Ford Direct Student Loans

The program provides loans to undergraduate and graduate students to help fund postsecondary education costs at participating institutions. 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 Federal Family Education Loan program fulfill their purpose of ensuring that low and middle income students can afford the costs 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 Education Department does not fully employ market mechanisms that could ensure optimal efficiency in program operations and benefits distribution. For example, allowing borrowers to lock in low, short-term fixed interest rates on consolidation loans even though the repayment schedule could be as long as 30 years.
  • A disproportionate amount of program benefits are provided to borrowers out of school versus students attending school because of inefficient policies on consolidation loans. Also, 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:

  • Developing long-term targets and timeframes for all relevant performance measures.
  • Directing a greater share of borrower benefits to students in school instead of those who have graduated.

Learn More

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