DeVos Backs Away From Single Student Loan Servicer

"The Trump administration is signaling a possible shift in its plan to grant the more than $1 trillion federal student loan portfolio to a single loan servicer, according to a Department of Education announcement Tuesday," according to U.S. News & World Report.

"In May, Education Secretary Betsy DeVos said the department intended to move to a system in which one company, instead of a larger group of contractors, would oversee outstanding federal student loans.

But in outlining its plans for the new system this week, the department said it will create a single data-processing platform to house all student loan information – a project mirroring one set in motion by the Obama administration – and customer account servicing will be handled either by a single contract servicer or by multiple contract servicers.

... Going forward, the department plans to collect feedback from stakeholders – including members of the servicing industry, financial aid organizations like the National Association of Student Financial Aid Administrators, and borrowers – about what a new servicing system should look like.

In choosing who will provide loan-servicing, department officials plan to consider a variety of factors, including past performance and technical capabilities."

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Publication Date: 8/2/2017

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