CBO:
Under the William D. Ford Direct Loan Program, the federal government provides education loans to undergraduate and graduate students and to the parents of undergraduate students. The federal government serves as the lender for all borrowers in the direct loan program but contracts with private entities to service those loans. Before July 1, 2010, the federal government also provided loan guarantees to financial institutions to provide federal student loans through the Federal Family Education Loan Program. The current program offers four types of loans:
- Subsidized loans are need-based loans for undergraduate students. No interest accrues while a borrower is enrolled or
during other deferment periods, and borrowing is limited by a student’s class level and dependency status. - Unsubsidized loans are non-need-based loans for undergraduate and graduate students. Interest accrues from
origination, and borrowing is limited by a student’s class level and dependency status. - Parent PLUS loans are non-need-based loans for parents of dependent undergraduates. Interest accrues from
origination, and borrowing is limited only by the cost of attendance. - GradPLUS loans are non-need-based loans for graduate students. Interest accrues from origination, and borrowing is
limited only by the cost of attendance.
The seven tables for federal student loan programs detail costs, loan volume, and subsidy rates as follows: - Table 1 shows cost projections for each budget account associated with the federal student loan programs, estimated
according to procedures established in the Federal Credit Reform Act of 1990 (FCRA). - Table 2 shows the credit reestimates and modifications that the Office of Management and Budget announced that it
would record in fiscal year 2024. Additionally, it shows 50 percent of the assumed modification needed for the costs
to outstanding loans related to the notice of a proposed rulemaking on loan cancellation. - Table 3 shows projections of loan volume for new direct student loans.
- Table 4 shows projections of subsidy rates for new direct student loans, by repayment plan, estimated using FCRA procedures.
- Table 5 shows interest rate projections for federal student loans.
- Table 6 shows cost projections for the federal student loan programs, estimated using fair-value procedures.
- Table 7 shows projections of subsidy rates for new direct student loans, by repayment plan, estimated using fair-valu