NASFAA Voices Concern Over OIG Report, Renews Calls for Structural Changes at FSA

February 14, 2019— NASFAA President Justin Draeger issued the following statement in response to the U.S. Department of Education Office of Inspector General's Federal Student Aid: Additional Actions Needed to Mitigate the Risk of Servicer Noncompliance with Requirements for Servicing Federally Held Student Loans report:

"With more than 44 million Americans in student loan repayment, the U.S. Department of Education Office of Inspector General’s (OIG) findings about improper oversight of the Office of Federal Student Aid's (FSA) federal student loan servicing contracts is disconcerting for borrowers and taxpayers. Improper oversight creates an environment that normalizes subpar customer service of an already confusing and frustrating process for too many borrowers. After graduating or leaving school, the servicer becomes the main, if not only, point of contact for borrowers, and the information that is provided  to them should be correct, easily understood, and comprehensive.

We are heartened to see that the Department of Education's Office of Federal Student Aid (FSA) has already adopted or has agreed to adopt all of the recommendations made by OIG. But issues identified in the OIG report span two administrations and point to organizational and structural changes that must be made to help FSA meet its congressionally mandated objectives as a performance-based organization (PBO).

In 2017 NASFAA published a report that benchmarked FSA against other federal PBOs and outlined several recommendations to strengthen accountability and transparency within the agency. As Congress most assuredly investigates these issues further and moves forward on reauthorizing the Higher Education Act, we urge structural changes to strengthen FSA’s functions."

To request an interview with a NASFAA spokesperson, please email powerse@nasfaa.org or call (202) 785-6959.

About NASFAA

The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.

Publication Date: 2/14/2019

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