- GAO cites 'serious weaknesses' in federal oversight of debt management system
- U.S. ends contract with 5 debt collectors, citing misrepresentations to borrowers
- Two fired federal debt collectors may still get government business, as they sue Education Department
- Obama administration will create student loan complaint system, centralized payments for borrowers
- Consumer Financial Protection Bureau to seek oversight of loan servicers
The Education Department is increasingly relying on collection agencies to obtain funds from those who have defaulted on student loans, but the department is failing to monitor complaints about these agencies, says a new report from the National Consumer Law Center. The center "found that contractors do not maintain accessible complaint systems and some agencies ignore the department’s minimum requirements for handling borrower grievances," the report says. "Overall, the complaint systems used by some collectors display a haphazard approach to resolving borrower disputes. The department also has failed to inform borrowers of the resources available through the agency to address complaints."
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