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Murray, Davis Request Information from U.S. Department of Education on Mismanagement of Federal Student Loan Program

Murray, Davis sent two letters to DeVos on Department’s mismanagement of federal student loan program


Recent Inspector General report found internal failures by Department in oversight of student loan servicers that receive federal contracts


Washington, D.C. – U.S. Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Congresswoman Susan Davis (D-CA), Chair of the House Higher Education and Workforce Investment Subcommittee, sent two letters today to Secretary of Education Betsy DeVos on the recent Office of Inspector General (OIG) report that found internal failures at the Department to appropriately oversee student loan servicers that receive federal contracts. The first letter urged the Department to fully implement changes that aligned with the OIG report’s findings, and the second requested a series of documents and information from the Department on its existing compliance system and planned improvements into its oversight of servicers.


“The OIG’s findings are clear evidence that the Department has let student loan servicers off the hook to the detriment of borrowers and taxpayers alike. The Department must immediately address severe shortcomings in its oversight and appropriately enforce compliance requirements with all contractors that receive taxpayer funding for servicing activities,” the Members wrote.


The OIG report, released on February 14, 2019, discloses “noncompliance” by all nine federal servicers, and sometimes repeated noncompliance—yet little being done to hold these servicers accountable. Student loan companies are violating consumer protections which leads to mistakes for borrowers, such as incorrectly applying payments to borrowers’ accounts, inappropriately capitalizing loan interest, improperly driving students into forbearance, and failing to give borrowers the opportunity to correctly enroll in income-driven repayment plans.


The first letter, urging the Department to fully implement changes, can be found HERE.


The second letter, requesting information and documents from the Department, can be found HERE.