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Tue Aug 1, 2017, 06:59 PM

Senators combat DeVos's reset on student loan-servicing contracts

Source: Washington Post

Senators combat DeVos’s reset on student loan-servicing contracts

By Danielle Douglas-Gabriel August 1 at 3:29 PM

A bipartisan effort is underway in the Senate to stop Education Secretary Betsy DeVos from handing the management of the federal government’s $1.2 trillion portfolio of education loans to a single contractor, instead of the nine companies now charged with the job.

Republican Sen. Roy Blunt of Missouri on Monday introduced legislation, co-sponsored by Sens. Elizabeth Warren (D-Mass.), James Lankford (R-Okla.) and Jeanne Shaheen (D-N.H.), to cancel the Education Department’s competition for a single student loan servicer and require the participation of multiple companies. The bill would instruct the department to allocate loans to servicers based on measures of their performance, such as borrower satisfaction with their service.

“Maintaining choice and competition amongst student loan servicers is the best way to ensure they will continue improving services for student borrowers,” Blunt said in a statement announcing the bill Tuesday.

The legislation arrives nearly three months after the Education Department amended its servicing contract solicitation. The original contract sought to create a single online platform for use by multiple loan servicers, but the department revised the terms to have one company build the portal and collect all federal student debt on its behalf. The decision, which would take effect once the existing contracts expire in 2019, riled some lawmakers, advocacy groups and at least one servicing company.

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Read more: https://www.washingtonpost.com/news/grade-point/wp/2017/08/01/senators-combat-devoss-reset-on-student-loan-servicing-contracts/

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