This summary report is one of a series addressing major policy, management, or program issues facing Congress and the administration. The issues identified in this report indicate the need to: reduce the cost and preserve the integrity of higher education student loan and grant programs; enhance the federal role in monitoring lenders, agencies, and schools involved in grant programs; and strengthen departmental management of data on individual student loans. The complexity of the federal student loan and grant program, coupled with default costs, demands greater departmental control. To enable the system to function effectively, the Secretary of Education should (1) encourage better collection practices by lenders and guaranty agencies; (2) increase incentives for lenders, agencies, and schools to protect federal financial interests; (3) enhance program monitoring of lending participants; and (4) improve the quality of data the Department of Education maintains on individual student loans. To enhance the federal role in elementary and secondary education programs, the Department of Education should (1) provide better guidance for program implementation of Chapter 1 and 2 legislation; and (2) work with states to ensure the availability of nationwide data needed to gauge program success. Finally, the Secretary of Education must strengthen departmental management by increased secretarial involvement and an improved financial management system that prevents waste of resources and generates reliable financial reports. (MLH)