The subcommittee heard testimony on the financial status of federal student aid programs. The thirteenth of a series of 44 hearings on the reauthorization of the Higher Education Act, the hearing investigated the conduct of the student financial aid programs by the Department of Education. Currently, the Department of Education enforces its student loan programs mainly through post-default penalties, such as penalties for schools with loan default rates of 35 percent or higher, and a 30 day waiting period between application and payment of student loans. Witnesses testified on methods to restore public and government confidence in the federal student loan programs run by the Department of Education. Mr. Thompson recommended ensuring the financial stability of the student loan program through maintaining larger financial reserves, which may reduce the availability of funds to students. Other recommendations made by the General Accounting Office include default prevention efforts such as increasing the lender's risk in making a loan, reducing borrower abuse, and stricter guidelines for schools participating in student loan programs.