Dept. of Ed failing to address loans
Recent audit reveals inadequacies
On Feb. 12, Byron S. Gordon, the Assistant Inspector General for Audit, issued a report of Federal Student Aid (FSA) to assess its effectiveness at providing student loans.
The audit revealed that the Department of Education is ultimately failing to regulate student loans companies, with Gordon claiming, “FSA had not established policies and procedures that provided reasonable assurance that the risk of servicer noncompliance with requirements for servicing federally held student loans was mitigated.”
This means that little is happening at the national level to ensure that loaners are being protected against further complications, like servicer noncompliance or violations of borrowers rights. The earliest date included in the audit was 2015, indicating a long-standing problem within the Department of Education shared by both the Trump and Obama presidencies.
Forbes estimates that the national student loan debt is over $1.5 trillion, with 44.2 million borrowers nationwide and an average debt per borrower of $27,975. A study by New Era Colorado, a non-partisan foundation focused on state and national politics, indicates that student debt in Colorado has increased by 176 percent from 2007 to 2017, 24 percent higher than the national average. The state suffered from $26 billion in education-related debt, and “nearly half” of all young adults owe some amount of student loan debt.
This report has left student loan advocates concerned for the current and future state of the exorbitant prices of college and how to approach them.
Regarding the report from Assistant Inspector General for Audit, New Era Colorado wrote on their Facebook page, “Infuriating, but absolutely not surprising. THIS is what happens when student loan servicers have exactly zero accountability.” They also attribute the existence of the student loan crisis to “the outrageous cost of college” and a “loan servicing industry designed to watch out for their own bottom line at the expense of borrowers.” New Era Colorado frequently organizes students in Colorado, including CU Denver, to share their own experiences with student debt.
Brooke Carter is a geography major at CU Denver who is worried about the debt she is going to have after college, especially after hearing about the department audit. “I just asked, ‘What is going on in this country?’” Carter said. “It feels like the government says they care but not enough to fix anything. These companies do not have our best interests in mind, and they were brought in by the government to help.” Carter specifically referenced Navient as one of those companies, who faced a lawsuit from the states of California, Illinois, Pennsylvania, and Washington.
For the time being, it is unclear how the problem of student loans will be addressed by the Department of Education and what steps will need to be taken in order to remedy the current shortcomings of the department.