New program to monitor loans

The Bush administration's fiscal 2007 budget proposal calls for a new President’s Management Agenda initiative that would improve and monitor credit program management. Federal agencies have more than $1.3 trillion in outstanding direct loans.

According to the proposal, five federal agencies – the Agriculture, Education, Housing and Urban Development, and Veterans Affairs departments and the Small Business Administration – will be part of a new initiative designed to manage risk.

Agencies receive scores based on their performance in loan origination, servicing and portfolio monitoring, and liquidation and debt collection.

A credit council comprised of the Office of Management and Budget and agency representatives will monitor the initiative.

“The council will identify agency and private-sector best practices that can be implemented across the major credit agencies, leading to higher program and management efficiencies, budgetary savings and improved PART scores,” the budget proposal states.