Washington — The U.S. Department of Education announced this afternoon that it would allow seven lenders to bill the department at the highest subsidy rate, saying audits submitted by the lenders proved they were eligible for the 9.5-percent rate of return.

The department suspended all payments at the 9.5-percent rate a year ago, saying it would pay the higher rate only if the lenders could prove, via an audit, that they qualified for it.

Since then 15 lenders have performed audits and seven have been approved for the higher rate: Utah Higher Education Assistance Authority, North Texas Higher Education Assistance Authority, Mississippi Higher Education Assistance Corporation, Student Loan Finance Corporation, Montana Higher Education Student Assistance, Access to Loans for Learning Student Loan Corporation, and Vermont Student Assistance Corporation.

The department rejected an audit submitted by the New Mexico Educational Assistance Foundation, saying it had not been performed in accordance with guidelines developed by the department’s inspector general.

This is not the first time the foundation has come under federal scrutiny. In 2005 the department’s inspector general issued a report accusing the New Mexico-based lender of overcharging the government by up to $36-million. The department commended the report, but chose not to recover the subsidy payments, saying the lender had “complied with applicable laws, regulations, and department guidance.”

The department’s decision to accept the other seven audits comes just over a week after it announced that it would recoup $15-million in improperly collected subsidies from the Pennsylvania Higher Education Assistance Agency, and almost exactly a year after it said it would allow the National Education Loan Network, a major for-profit student-loan provider based in Nebraska, to keep $278-million in overpayments. Both decisions followed audits by the department’s inspector general that recommended that the department seek to recover excess subsidies paid to the lenders.

At issue in all of the audits are payments the Education Department makes to lenders that have financed new student loans with tax-exempt bonds.

In the 1980s, Congress allowed nonprofit lenders — those that finance their loans with tax-exempt bonds — a guaranteed rate of return of 9.5 percent to help protect them at a time when the economy was sour and the cost of making loans was soaring. Congress eliminated that guarantee in 1993 and grandfathered in existing loans.

But most nonprofit lenders and some large for-profit loan companies that have purchased nonprofit agencies maintained until recently that government regulations allowed them to continue to receive the 9.5-percent return by using the returns on loans backed by the bonds to make new loans, a lucrative practice known as “recycling.”

In the audit of Nelnet, the inspector general said lenders were eligible to receive the 9.5-percent rate of return only on so-called first-generation loans (those made using the original pre-1993 bonds) and second-generation loans (those made using payments, interest, or subsidies received on loans financed with the original bonds). But any loans made with the proceeds of second-generation or later loans do not qualify for the subsidy, the audit concluded.

After the audit was released, the department sent a letter to lenders saying it would allow lenders to keep millions in alleged overpayments if the lenders accepted the department’s interpretation of which loans were eligible to receive the highest subsidy, submitted to an audit, and agreed to certify in future billings that the loans were eligible for the subsidy

Four additional audits are currently under review — those of Louisiana Public Facilities Authority, Panhandle-Plains Higher Education Authority, Iowa Student Loan Liquidity Corporation, and South Texas Higher Education Authority. Two lenders — Missouri Higher Education Loan Authority and CollegeInvest — have asked for more time to submit their audits. —Kelly Field