As the U.S. Department of Education manages an increasingly larger portfolio of federal student loans, officials at the agency lack a coordinated plan for preventing borrowers from defaulting, the department’s independent watchdog said Friday.
An Inspector General audit found that the department’s in-house default prevention activities were ad hoc and that officials did not demand that the agency’s contracted loan servicers conduct meaningful default prevention activities.
"The department does not have a comprehensive plan or strategy to prevent student loan defaults and thus cannot ensure that default prevention efforts conducted by various offices are coordinated and consistent," the audit report said.
The audit notes that the department has recently, among other things, developed new web tools, conducted financial literacy campaigns and started one-off email campaigns to encourage struggling borrowers to enroll in income-based repayment plans. However, the report, says, those efforts lacked coordination.
Read more at Inside Higher Ed: https://www.insidehighered.com/news/2014/12/15/federal-audit-faults-education-department-lack-plan-prevent-student-loan-defaults