A top Treasury Department official on Tuesday challenged the Department of Education and its contractors over how they handle borrowers struggling with student debt.
Pointing to the 7 million borrowers in default on their federal student loans, Sarah Bloom Raskin, deputy treasury secretary, questioned why borrowers had defaulted, given the availability of generous repayment plans that link monthly payments to incomes. For example, a borrower with no income could pay nothing, yet still remain current on student loans.
Raskin's remarks at the University of Maryland campus in Baltimore County, herfirst public speech since joining the Treasury Department earlier this year, suggest she may be among federal policymakers outside the Education Department who view student loan defaults largely as a consequence of poor loan servicing, rather than an outcome driven by deadbeat borrowers.
The speech also suggests that the Treasury Department may begin publicly pushing the Education Department to clean up how its loans are serviced. In an email earlier this month, Dorie Nolt, Education Department spokeswoman, said, "Of the more than 40 million borrowers with outstanding student loan debt, the vast majority have not expressed any concerns about servicers."
Read more at The Huffington Post: http://www.huffingtonpost.com/2014/04/29/sarah-bloom-raskin-student-loans_n_5236069.html?&ir=College&ncid=tweetlnkushpmg00000056