performance metrics<\/a>, including ones on employee morale, customer satisfaction and cybersecurity.<\/p>\n\u201cThere\u2019s plenty for us to be worried about from this report,\u201d said Justin Draeger, president of the National Association of Student Financial Aid Administrators. \u201cWe\u2019re heading into the highest stakes ever for students and borrowers.\u201d<\/p>\n
Student loan payments, which have been paused since March 2020, could resume this year after the Supreme Court rules on whether the Biden administration\u2019s plan to forgive up to $20,000 in federal student loans for eligible Americans is legal.<\/p>\n
Additionally, several new regulations for debt-relief programs will go into effect July 1. The department also is planning to adjust borrowers\u2019 accounts to more accurately track their repayment progress. In October, the department is supposed to launch a new version of the Free Application for Federal Student Aid, though some experts are concerned the agency won\u2019t meet that goal.<\/p>\n
\u201cThere are more challenges ahead,\u201d Draeger said. \u201cIf you were stressed already, this report didn\u2019t help.\u201d<\/p>\n
Draeger said that FSA\u2019s annual report shows the need for reform at the agency, which is one of the few performance-based organizations in the federal government. The performance-based organizations were created in part to give agencies private-sector flexibility. The agency is managed by a chief operating officer but doesn\u2019t have a Board of Directors like other performance-based organizations.<\/p>\n
\u201cThis report points to the fact that FSA governance needs to be revisited by Congress,\u201d he said.<\/p>\n
Complaints and Policy Recommendations<\/h3>\n
Mike Pierce, executive director of the Student Borrower Protection Center, said the ombudsman\u2019s report did a good job of highlighting the pain points in student loan policy and putting a face on the issues.<\/p>\n
\u201cThe previous [ombudsman] reports have been technical and dry and didn\u2019t do a good job of lifting up borrowers\u2019 voices,\u201d he said. \u201cThe department is finally centering student loan borrowers in management of student aid.\u201d<\/p>\n
Latreille\u2019s report recommended stricter requirements for college-sponsored accounts, changes the bankruptcy rules for student loans and a broader overhaul of Parent PLUS loans.<\/p>\n
Those are areas \u201cin which students, borrowers, and families of color may be disproportionately burdened by their student loan debt during the financial aid lifecycle,\u201d the report says.<\/p>\n
Advocates have said for years that Parent PLUS loans disproportionately burden low-income families of color. The loans are costly and not subject to many of the new, more generous debt-relief programs, including the proposed income-driven repayment program. Up until late last year, Parent PLUS loans weren\u2019t included in the department\u2019s planned account adjustment.<\/p>\n
\u201cWhile Parent PLUS loans may have been originally intended as a way for high-asset, low-liquidity families to pay for school, research shows that the reality of who is taking out these loans is quite different,\u201d the ombudsman wrote. \u201cIn fact, the high costs of Parent PLUS loans are disproportionately borne by families of color, who have less wealth to pull from to pay for school and therefore rely on Parent PLUS loans to bridge the gap between the cost of attendance and other federal aid offerings.\u201d<\/p>\n
The ombudsman\u2019s report says the recommendations were informed by the complaints.<\/p>\n
About 57\u00a0percent of the complaints were about issues with repayment or loans\u2014about 30\u00a0percent were about the Public Service Loan Forgiveness and the limited waiver that temporarily changed the terms of the program. Borrowers who are currently incarcerated also reported logistical challenges accessing debt relief programs and getting information from their student loan servicer. The ombudsman recommended that the department consider automation and other strategies to better serve incarcerated borrowers.<\/p>\n
Pierce said it\u2019s \u201cextraordinary\u201d that complaints doubled in a year that student loan payments were paused, which he said shows that borrowers are struggling to access the new debt-relief measures and that there\u2019s a lot of work to do toward improving student loan programs.<\/p>\n
\u201cBorrowers eligible couldn\u2019t make heads or tails [of] the waiver,\u201d he said. \u201cLots of folks missed out.\u201d<\/p>\n
Borrowers also complained about issues with customer support and institutions. Twenty-three\u00a0percent of the complaints were about applying for student aid.<\/p>\n
\u201cAnd that\u2019s with an application that\u2019s stable and well tested,\u201d Draeger said.<\/p>\n
Draeger and others have publicly expressed concerns about the department\u2019s timeline for FAFSA simplification and the pace of progress thus far.<\/p>\n
He said the ombudsman\u2019s call to view the student loan system through an equity lens is a valuable one. But, he said, the focus on the back end of the system was a missed opportunity. He would\u2019ve liked to see more front-end issues that cover borrowers currently taking out loans addressed, such underwriting criteria for Parent PLUS loans or caps on how much someone can borrow.<\/p>\n
\u201cOnly focusing on the back end leaves aside the high amounts of debt that we put on people of color disproportionately,\u201d he said.<\/p>\n<\/div>\n\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The federal student aid system needs \u201crobust interventions\u201d in order to break the cycle of inequity in higher education finance, the ombudsman for the agency that runs the system concluded in its annual report. \u201cAt each stage of the student aid lifecycle, the higher education finance model disproportionately fails families of color,\u201d the ombudsman\u2019s report …<\/p>\n","protected":false},"author":1,"featured_media":48449,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/48448"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=48448"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/48448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/48449"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=48448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=48448"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=48448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}