Servicing Issues Task Force Report

SITF Report CoverThe National Direct Student Loan Coalition (the Coalition) and National Association of Student Financial Aid Administrators (NASFAA) Servicing Issues Task Force was convened by the NASFAA Board of Directors and the Executive Board of the Coalition to deliver a report to the Department of Education and other relevant agencies, containing recommendations for improving federal student loan servicing, clearly indicating (1) areas of deficiency in loan servicing, (2) the extent (how widespread) of those deficiencies, and (3) proposed solutions. The task force comprised a geographically diverse group of NASFAA and Coalition members from all types of postsecondary institutions, including members representing graduate and professional institutions. The Coalition Executive Board and NASFAA Board of Directors voted to approve the recommendations in January of 2015.

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Task Force Guiding Principles

The guiding principles of the Servicing Issues Task Force included a review of the current loan servicing landscape with special attention given to:

  • Promoting fairness and equity for students across all sectors of postsecondary education
  • Promoting accountability
  • Encouraging simplicity
  • Promoting the use of technology wherever possible, and
  • Supporting recommendations with research and data analysis wherever possible

Recommendations

Based on the research and discussions, the task force developed six recommendations, divided into two broad areas of focus:

Focus Area: Information and Communication

    1. Develop a central loan portal where students can manage all of their loans
    2. Remove servicer branding from communication with borrowers
    3. The Department of Education should provide standard consumer protections that are in line with other consumer financial products
    4. The Department of Education should permit the use of innovative technologies in order to allow servicers to more efficiently and effectively communicate with borrowers
    5. The regulatory requirements of entrance and exit counseling should be incorporated into ED’s Financial Awareness Counseling Tool (FACT)

Focus Area: Standardization

  1. The Department of Education should develop a policies and procedures manual for servicing

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Resources

Publication Date: 2/4/2015

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