Financial Arm Of The Department Of Education Falling Down On The Job, Watchdog Says

"Government watchdogs skewered the financial arm of the Department of Education on Wednesday for sloppy communication with contractors, colleges and borrowers, raising concerns about the division’s ability to manage more than $1 trillion in federal student loans and grants," according to The Washington Post's Grade Point.

"The aptitude of the Office of Federal Student Aid, which administers all federal loan, grant and work-study programs, came into question at a joint House hearing on the division. Testimony from the Government Accountability Office and the department’s inspector general detailed lax oversight of schools receiving aid and student loan servicers, the middlemen who collect and apply borrower payments. ...

But college financial aid officers argue that FSA takes months, and in some cases years, to respond to program reviews, renewals and changes in participation agreement, according to Justin Draeger, president of the National Association of Student Aid Administrators.

He testified that FSA missed its own deadlines during the roll out of the administration’s so-called gainful employment rule, which limits how much debt students can amass in career training programs. When schools asked for more guidance during the process, the office dragged its feet in responding and threatened to go after schools for failing to comply with the rule, Draeger said.

'FSA continues [through] self-assessment to give itself high marks, pay healthy bonuses and avert responsibility for these persistent issues,' he said. 'We see FSA as a partner, but partnership is not a one-way street.'"

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: 11/19/2015

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