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Salem Radio Network News Wednesday, October 18, 2017

U.S.

U.S. to give contract for student loan servicing to one company

WASHINGTON (Reuters) – The U.S. Education Department said on Friday it was changing its approach to student-loan servicing, awarding a contract to handle outstanding debts to one company.

Under former President Barack Obama, much of the $1.3 trillion business of student lending was moved from banks and other companies to the federal government. Four companies still handled servicing the loans. Navient Corp <NAVI.O>, which was spun off Sallie Mae <SLM.O> in 2014, is the largest servicer.

“We’re confident that the final decision will have someone who steps up and can perform,” Acting Undersecretary Jim Manning said on a call with reporters.

In an op-ed published on the Wall Street Journal website around the same time as the call, Education Secretary Betsy DeVos wrote that the servicing requirements put in place by Obama’s administration created a “chaotic system” that generated numerous consumer complaints and was not sustainable.

She added that the single servicer will create a user platform and establish a standardized process for handling customer calls.

(Reporting by Lisa Lambert; Editing by Jonathan Oatis and David Gregorio)

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