Archived Information

Reauthorization of the Higher Education Act

Administration Guaranty Agency Proposals
Improve Accountability, Reduce Costs

As part of the FY 1999 President's Budget, the Administration is proposing a comprehensive plan to restructure Federal Family Education Loan (FFEL) program guaranty agencies on a performance-based, fee-for-service model. By increasing accountability, standardizing policies and procedures, and rewarding guaranty agencies for the effective provision of specific, clearly defined services, these proposals offer clear benefits for lenders and schools; save Federal taxpayers over $2 billion over FY 1999-2003; and significantly improve the effectiveness of the FFEL program as a whole.

In brief, the President's proposal is built around the following major provisions:

The President's proposal offers the following significant benefits to FFEL program participants:



Return to Interest Rate Reduction page