ED Withdraws Policy Memos on Student Loan Servicing Process

April 17, 2017

U.S. Department of Education (ED) Secretary Betsy DeVos has withdrawn several policy memos from the previous Obama Administration regarding the student loan servicing procurement process that significantly changes how student borrowers repay their federal loans. Because ED has not issued new guidance, the impact of this change on ASHA's members is yet to be determined. ED's goal is to "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."

Background

The memo [PDF] on student loan servicing recompete, sent to the Office of Federal Student Aid, specifically withdraws (1) the June 30, 2016, memorandum from former Secretary John King; (2) the July 20, 2016, memorandum from former Under Secretary Ted Mitchell; and (3) the October 17, 2016, addendum to the July 20, 2016, memorandum from former Under Secretary Mitchell on this issue. ED's action rescinded Items 1, 2, and 3; these items called for, among other things, a streamlined procurement system, which allows borrowers to navigate loan repayment with ease by logging into a single web portal to access information, make payments, apply for benefits, and manage their account.

Resources

For more information on the Secretary's action, please contact Catherine D. Clarke, ASHA's director of education and regulatory advocacy, at cclarke@asha.org or 202-624-5953. For detailed questions on the student loan issue, contact Peggy Savage, ASHA's membership relations manager, at psavage@asha.org or 301-296-8684.


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