Report Says Colleges Bilking Loan Program: A Report from the Government Accountability Office of the United States

A program designed to provide student aid has spun out of control, becoming a cash cow for colleges and universities. The Department of Education has not adequately controlled the Federal Family Education Loan Program (FFELP), according to a recent report from the Government Accountability Office (GAO). Originally, traditional lending institutions gave loans to help students pay for higher education, but schools themselves have increasingly become lenders. In the 1993-1994 school year, higher education institutions disbursed about $155 million. By 2003-2004, that amount had mushroomed to about $1.5 billion, the GAO said in its report, "Federal Family Education Loan Program: More Oversight Is Needed for Schools That Are Lenders."