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Guaranteed Versus Direct Lending: The Case of Student Loans: Working Paper 2007-09

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  • Deborah Lucas
  • Damien Moore

Abstract

The federal government makes low-cost financing for higher education widely available through its fast-growing direct and guaranteed student loan programs. Both programs offer borrowers similar loan products and terms. From the perspective of other key stakeholders, including educational institutions, commercial lenders, and state guaranty agencies, the programs differ significantly. The programs also report widely divergent budgetary costs. In this study, we propose and implement a methodology to estimate the cost of the two programs in market-value terms. In doing so, we

Suggested Citation

  • Deborah Lucas & Damien Moore, 2007. "Guaranteed Versus Direct Lending: The Case of Student Loans: Working Paper 2007-09," Working Papers 18759, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:18759
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    File URL: https://www.cbo.gov/sites/default/files/110th-congress-2007-2008/workingpaper/2007_09_studentloans_0.pdf
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    References listed on IDEAS

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    Cited by:

    1. Natalie Cox, 2017. "Pricing, Selection, and Welfare in the Student Loan Market: Evidence from Borrower Repayment Decisions," Working Papers 2017-2, Princeton University. Economics Department..
    2. Rajeev Darolia, 2013. "Student Loan Repayment and College Accountability," Consumer Finance Institute discussion papers 13-5, Federal Reserve Bank of Philadelphia.
    3. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.

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