U.S. Department of Education Unveils New Approach to Federal Student Aid Compliance


9/6/2017 6:04:00 PM

Secretary of Education Betsy DeVos hires several senior staff members to take a stronger stance against “bad actors.”

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The U.S. Department of Education (DOE) has announced new team members to lead the Federal Student Aid’s (FSA) renewed focus on regulatory enforcement and providing consumer protections to student borrowers.

"Protecting students has always been my top priority," Secretary of Education Betsy DeVos said in a news release. "This new approach will enhance our efforts on our oversight responsibilities, including enforcement against bad actors, such as illegitimate debt relief organizations [and] schools defrauding students….”

DeVos appointed A. Wayne Johnson as chief operating officer of the DOE’s Federal Student Aid Office in June, ACA International previously reported. The office administers more than $1.4 trillion in federal student loan balances.

"FSA recognizes that there are many quality institutions that participate in the federal student aid programs, along with many third-party service providers that are committed to effectively administering and operating the programs,"  Johnson said in the news release. "But FSA has an obligation to ensure that any organization affiliated with these programs understands its responsibilities and complies with federal student aid statutes, regulations and other related consumer protection laws."

The FSA office currently serves 42 million student loan borrowers, according to the DOE.

"We will not allow bad actors to harm students, parents, borrowers and taxpayers," Johnson said. "We will enforce what is right for students at every turn of their student aid life cycle, regardless of whether they are applying for, receiving or repaying aid."

The DOE’s new leaders in the Federal Student Aid office will focus on enforcement, outreach, communications and risk management.

They include:

  • Michael Dean, chief enterprise risk officer. Dean will lead the team that proactively identifies, assesses and monitors risks enterprise-wide, including fraud-, cybersecurity-and compliance-related risks.
  • Charles Patterson, senior advisor for executive-level compliance and enforcement outreach. Patterson will focus on communications with leaders at colleges and universities, as well as on outreach to university systems; higher education organizations; and other federal, state and local stakeholders with a shared interest in protecting students, parents and borrowers.
  • Julian Schmoke Jr. joins the FSA office to lead enforcement activities. In addition to a track record of successfully advocating for students for more than 20 years, he brings experience in higher education leadership, instruction and accreditation, including serving in an academic capacity at DeVry University, where he ensured the delivery of a quality education to students.
  • Chris Greene returned to the FSA office to head the communications, outreach and customer experience teams. He brings nearly 20 years of student aid, government and communications experience to the organization and will be responsible for ensuring that FSA's communications infrastructure serves the needs of all stakeholders.

Under Johnson’s leadership, the DOE also released a new plan for federal student loan servicing in August, ACA International previously reported.

Contracts with current Federal Student Aid student loan servicers expire in 2019, according to DOE.

In the new plan, the Federal Student Aid (FSA) Next Generation Processing and Servicing Environment, “will provide for a single data processing platform to house all student loan information while at the same time allowing for customer account servicing to be performed either by a single contract servicer or by multiple contract servicers,” according to a news release from the DOE.

The DOE also cancelled its call for one company to manage borrowers’ payments on federal student loans announced in May, ACA previously reported.

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