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Principale » Government may reverse decision on student loan servicing

Government may reverse decision on student loan servicing

02 Août 2017

Wayne Johnson, the chief operating officer at the Office of Federal Student Aid since July, said the department's new procurement plan would allow for the introduction of the most up-to-date technology and practices from the private sector into the loan-servicing system. U.S. Secretary of Education Betsy DeVos is leading this effort.

Dr. A. Wayne Johnson, the newly appointed Chief Operating Officer (COO) of Federal Student Aid (FSA), had the following to say: "The FSA Student Loan Program represents the equivalent of being the largest special goal consumer bank in the world.

Commenting in the press release, COO Dr. Wayne said, "When FSA customers transition to the new processing and servicing environment in 2019, they will find a customer support system that is as capable as any in the private sector". This new approach is also expected to require separate acquisitions for database housing, system processing and customer account servicing which will allow for maximum flexibility today and into the future. "To improve customer service, we will take the best ideas and capabilities available and put them to work for Americans with student loans".

The department plans to deliver, meanwhile, on creating a single web portal for borrowers to make payments on student loans regardless of their borrowers - a change promised by the Obama administration a year ago and long sought by student advocates. This is "Solicitation #ED-FSA-17-R-001". DeVos, "By starting afresh and pursuing a truly modern loan servicing environment, we have a chance to turn what was a good plan into a great one".

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You can view the Pronouncement on FSA's Next Generation Processing and Servicing Environment here.

Current loan-servicing contracts are set to expire in 2019, but a department spokeswoman, Liz Hill, said officials fully expect to have the procurement completed and contracts awarded before then. Dr. Johnson and his team will have the new processing and servicing environment in place prior to the expiration of the current contacts.

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". "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". Additionally, customer account servicing could be conducted by either one student loan servicer or by multiple servicers, but that detail has yet to be ironed out. Draeger said the group's highest priority is ensuring borrowers have the same experience paying student loans regardless of their servicer.

Blunt and Warren were part of a bipartisan group of senators who introduced legislation ahead of the department's announcement Tuesday to block the single-servicer plan. "We look forward to working with our federal colleagues to make sure that happens".

Government may reverse decision on student loan servicing