Critics Blast Federal Agency For Shoddy Oversight Of College Loans

"Lax oversight and poor communication have beset a little-known federal agency charged with managing the federal student aid program, several witnesses testified Wednesday at a Congressional hearing," according to The Hechinger Report.

"The problems — cited in a series of governmental investigative reports, including a new Government Accountability Office (GAO) report that found 'key weaknesses' at the agency — have led to improper payments, colleges being left in limbo about whether their student aid programs comply with the law, and students getting inadequate information about loan repayment options, the witnesses said.

As many in the nation’s higher education system strive to make student borrowing more reasonable, both in cost and in repayment plans, the agency — the Office of Federal Student Aid, or FSA – has often hampered these efforts, critics said. ...

'Despite FSA’s many assurances and despite my belief that their staff is dedicated, I also believe we’ll continue to see these problems until there are meaningful structural and cultural changes at this agency,' said Justin S. Draeger, president of the National Association of Student Financial Aid Administrators.

Draeger lamented that FSA had sent a series of 'threatening letters' to colleges and universities about their alleged lack of compliance with federal student aid regulations, only for the schools to find out later that they were not in violation."

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: 11/20/2015


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