"The U.S. Department of Education announced late Tuesday that it was reversing course on its plan to award all federal student loans to a single student loan servicer and creating a new 'environment' for how it operates — a move that student advocates and even one of the most vocal critics in Congress tepidly hailed as a good move," Diverse: Issues in Higher Education reports.
"Contracts with current FSA student loan servicers expire in 2019, according to the Education Department statement. The new processing and servicing 'environment' is expected to be in place before those contracts expire.
FSA said in a statement that the agency is planning a 'financial services/student loan industry-wide collaborative information gathering effort' and 'will engage various stakeholders and industry technology leaders as it moves along a timeline for future contracting and deployment.'
Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, or NASFAA, said his organization applauds the 'intended direction the Department is taking to engage with stakeholders to get federal student loan servicing right.'
'The key will be to have strong consumer-centric requirements in the contracts so borrowers can get the best service possible,' Draeger said in a statement. 'Instituting a one-stop shop where students can easily access all their loan information is a great first step to help reduce miscommunication between servicers and borrowers.'
'As always, our highest priority will be ensuring that borrowers have a seamless experience that makes loan repayment as easy as possible,' Draeger’s statement said. 'We look forward to working with our federal colleagues to make sure that happens.'"
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Publication Date: 8/2/2017