Do The Education Department Sufficiently Oversee Student Loan Borrowers?

Washington – Senate Democrats have several questions directed to the Education Department.  The major question was 'how do you oversee the companies that manage payments of student loan borrowers.'  Federal students loans are not managed by the government, they are managed by companies that loan money and or credit, these companies are making billions on interest and of course are extremely profitable, lucky them. 

James Runcie is the chief operating officer of Federal Student Aid, he defended the government agency contracts with loan servicing companies.  Runcie defended the agency by stating, “the department’s model for measuring how well its services are performing has worked well” (how much do you want to make a bet that his mom and dad paid for his education).  Runcie also stated “The metrics in that formula – which include data about loan defaults and satisfaction surveys of borrowers, colleges and department employees – have all improved since the four-servicer program began in 2009”, according to Runcie. The Department of Education that oversees the agencies stated that they would renew the contracts that are ending in June 2014 and extend those contracts through to July 2019. 

According to Senator Tom Harkin of Iowa and Senator Elizabeth Warren of Massachusetts they have been informed of negative comments from borrowers about Sallie Mae and Senator Warren pointed to the federal government’s investigation on three agencies over its loan servicing practices.  The only comment from Runcie was “We strictly monitor their compliance to the contracts.  And we’re very open to looking at those contracts and seeing if there’s additional terms and things we should put in there.”  Both Senators were not pleased by Runcie's answer, and Senator Warren fired off  “I’m very concerned about re-upping a multimillion-dollar contract with Sallie Mae, when Sallie Mae has demonstrated time and time again that it’s not following the rules.” 

Regardless, education cost is a tough pill to swallow but it is a reality.  The options of not going to school and finding a profession are more costly with regards to your salary expectations.  I do wish that the government would step in and find a better method to help students pay for their education.  If you remember a couple of months ago I wrote a blog on a university that required students to pay a percentage of their salary towards student loans after graduation, meaning depending on their income the payment would be manageable.  And what about past graduates that are paying how are they protecting those students?  I would personally like to thank Senator Warren and Harkin for leading the way in this debate but come on federal government step up and make the difference to those who are trying to make their lives better by pursuing their education.  Thanks for listening to my rant, comments are always welcome, you may rant below.

Elizabeth Koukladas-Director   

Bearla International Studies

info.bearla@gmail.com