Federal Watchdog Issues Scathing Report On Ed Department's Handling Of Student Loans
February 14, 2019 11:20 AM ET
CORY TURNER, NPR
A critical new report from the U.S. Department of Education's Office of Inspector General finds the department's student loan unit failed to adequately supervise the companies it pays to manage the nation's trillion-dollar portfolio of federal student loans. The report also rebukes the department's office of Federal Student Aid (FSA) for rarely penalizing companies that failed to follow the rules.
(Note that Student Loan Debt Has Nearly Tripled In The Last Decade.)
Instead of safeguarding borrowers' interests, the report says, FSA's inconsistent oversight allowed these companies, known as loan servicers, to potentially hurt borrowers and pocket government dollars that should have been refunded because servicers weren't meeting federal requirements.
The audit documents several common failures by the servicers, among them, not telling borrowers about all of their repayment options, or miscalculating what borrowers should have to pay through an income-driven repayment plan. According to the review, two loan servicing companies, Navient and The Pennsylvania Higher Education Assistance Agency (PHEAA), better known as FedLoan, repeatedly placed borrowers into costly forbearance without offering them other, more beneficial options.
https://www.npr.org/2019/02/14/694477547/federal-watchdog-issues-scathing-report-on-ed-departments-handling-of-student-lo
= new reply since forum marked as read
