4/19/2017 4:00:00 PM
U.S. Secretary of Education Withdraws Memos on Student Loan Servicing
The memos include 2016 policy direction for federal student loan servicing.
U.S. Department of Education (DOE) Secretary Betsy DeVos is withdrawing several memorandums on student loan servicing issued by former Secretary John King and former Under Secretary Ted Mitchell.
“The student loan servicing procurement affords us a significant opportunity to improve outcomes and experiences for federal student loan borrowers, as well as demonstrate sound fiscal stewardship of public dollars,” DeVos said in a news release from the DOE. “We must create a student loan servicing environment that provides the highest quality customer service and increases accountability and transparency for all borrowers, while also limiting the cost to taxpayers.”
DeVos issued a letter on the memorandums to Federal Student Aid Chief Operating Officer James Runcie April 11.
Mitchell issued one of the withdrawn memorandums on July 20, 2016.
“This memorandum provides policy direction for the servicing of all federal student loans. The direction below is driven by the experiences of federal student loan borrowers and is responsive to the need to establish a transparent and accountable system that allows for continuous improvement,” it states.
The DOE, with the U.S. Department of the Treasury and the Consumer Financial Protection Bureau, also released guidelines for federal student loan servicing in July 2016, ACA International previously reported. They expand on a joint statement of principles on student loan servicing that the agencies released in conjunction with a fall 2015 report to guide improvement in student loan servicing practices.
“As the department strives toward our stated goal of increasing college access, affordability and quality, it is imperative to exercise due diligence in acquiring new federal student loan servicing capabilities,” DeVos said in the letter issued this month. “Our mission in the student loan servicing procurement process is to provide high quality customer service to federal loan borrowers in a cost-efficient and effective manner.”
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