DeVos Shifts Course Again on Loan Servicing

"The Department of Education plans to overhaul the procurement process for federal student loan servicing for the third time in the last year, officials announced Tuesday," Inside Higher Ed reports.
 
"It will scrap a plan Secretary Betsy DeVos unveiled in May to award servicing of all federal student loans to a single company. Instead, the department will award separate contracts for database housing, system processing and customer service functions to one or more companies possibly handling direct interactions with borrowers. The department plans to deliver, meanwhile, on creating a single web portal for borrowers to make payments on student loans regardless of their borrowers -- a change promised by the Obama administration last year and long sought by student advocates. ...
 
A task force from the National Association of Student Financial Aid Administrators about a year ago examined challenges for borrowers in the student loan servicing system.
 
'One of the biggest challenges we identified is the fact that there were multiple servicers with multiple systems,' said Justin Draeger, president and CEO of NASFAA.
 
NASFAA was not committed to a loan-servicing system involving either one or multiple servicers. Draeger said the group's highest priority is ensuring borrowers have the same experience paying student loans regardless of their servicer."
 
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 8/2/2017

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