ABSTRACT
The guaranteed student loan (GSL) program provides students with the financial means to study at the postsecondary institution of their choice. The program provides federal subsidies to private and state lenders who make long-term, low-interest, noncollateral loans to students. The GSL program is an appropriated entitlement. All eligible persons are entitled to receive loans. The Education Amendments of 1980 authorized the Student Loan Marketing Association to make loans in areas where there is a severe shortage of student loan capital. The reconciliation act sought to control federal spending by changing several provisions of the Higher Education Act. A parent loan program was established by the Education Amendments of 1980. The reconciliation act raised interest rates on loans to parents from 9 to 14 percent, effective October 1, 1981. The reconciliation act authorized Sallie Mae to extend loans in states where there is no state guarantee or nonprofit agency or where students are unable to obtain loans.
