Student Loan Default Prevention and Debt Collection Act of 1987

Student Loan Default Prevention and Debt Collection Act of 1987 - Amends the Higher Education Act of 1965 to set forth provisions relating to default rates under the guaranteed student loan program.

Requires each guaranty agency to furnish the Department of Education with information on the amount of each guaranteed student loan. Requires such information to be used in the National Student Loan Data System. Requires each guaranty agency to expand and standardize the confirmation reports to be submitted on the date of enactment of this Act in order to assure that such information is provided at least bimonthly on student loan delinquencies, defaults, and the change in status of borrowers whose loans are delinquent or in default. Requires each guaranty agency to provide the Secretary of Education (the Secretary) with complete and accurate data on a quarterly basis in order to facilitate the usefulness of the National Student Loan Data System.

Allows the guaranty agency to enter into agreements whereby the eligible institution may make principal and interest payments on defaulted guaranteed student loans in order to reduce the default rate.

Requires (current law authorizes) guaranty agencies to furnish to eligible institutions, upon request, specified information on students who are delinquent or have defaulted on guaranteed student loans. Requires that such information include names and addresses of such students.

Revises the definition of "default."

Includes supplemental loans for students under specified eligibility provisions.

Requires (current law authorizes) the Secretary to establish and carry out the National Student Loan Data System.

Prohibits guaranty agencies from making any limitation, suspension, or termination action with respect to an eligible institution based on a default rate unless the default rate is based upon an average of three years' experience in the guaranteed student loan program.

Requires eligible lenders or holders of loans under the guaranteed student loan program to: (1) furnish the appropriate eligible institution a copy of the first delinquency notice and final demand letter to the guaranty agency; and (2) notify the borrower and the eligible institution within 30 days of the sale or other transfer of the loan.

Directs the Secretary, in establishing criteria for disqualification of eligible institutions under the guaranteed student loan program, to include provisions giving eligible institutions credit for successfully serving high risk students in the calculation of the default rate.

Requires each eligible institution to maintain and make available to guaranty agencies upon request additional information on student borrowers, including family addresses, the parents' place of business, and other information relevant to the collection of guaranteed student loans that are delinquent or in default.

Requires eligible institutions to require all student borrowers to sign a form at or before the first disbursement of a guaranteed student loan outlining its terms and conditions and the borrower's rights and responsibilities.

Requires eligible institutions to withhold academic transcripts of any borrower in default on a guaranteed student loan: (1) until the institution has received notice from the guaranty agency that the borrower has reentered payment status; or (2) unless this requirement is waived pursuant to regulations by the Secretary because the borrower is unemployed or disabled.

Requires eligible institutions to develop, carry out, and periodically review a guaranteed student loan default prevention policy and plan. Prohibits the Secretary from promulgating regulations with respect to such policy and planning requirements.

Requires eligible institutions to require guaranteed student loan borrowers to submit to the institution during a required exit interview the borrower's address after graduation (or after leaving the institution for any other reason), the address of the borrower's next of kin, and the borrower's driver's license number.

Requires a statement on the consequences of defaulting on a guaranteed student loan to be included in an eligible institution's financial assistance information for students. Revises the definition of "prospective student" for purposes of such information requirements.

Directs the Secretary to develop and publish an annual default report to the Congress on the guaranteed student loan program beginning on September 30, 1988. Sets forth the contents for such report.

Directs the Secretary to develop a plan, to be published for public comments, for the conduct of program reviews, at least once triennially, of all eligible institutions and eligible lenders under the guaranteed student loan program. Requires the Secretary to report annually to the Congress on the results of such reviews.

Prohibits an eligible institution, in the case of a guaranteed student loan obtained by a borrower for the first period of instruction at that institution, from certifying the eligibility of such student to receive the loan prior to a specified period after classes have begun.