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ERIC Number: ED561999
Record Type: Non-Journal
Publication Date: 2014-Mar
Pages: 36
Abstractor: ERIC
Reference Count: N/A
Federal Student Loans: Better Oversight Could Improve Defaulted Loan Rehabilitation. Report to Congressional Requesters. GAO-14-256
Emrey-Arras, Melissa
US Government Accountability Office
The Department of Education (Education) relies on collection agencies to assist borrowers in rehabilitating defaulted student loans, which allows borrowers who make nine on-time monthly payments within 10 months to have the default removed from their credit reports. Education works with 22 collection agencies to locate borrowers and explain repayment options, including rehabilitation. The U.S. Government Accountability Office (GAO) was asked to review Education's loan rehabilitation process. This report examines: (1) how Education assists borrowers in rehabilitating defaulted student loans; (2) how the upgrade of its defaulted loan information system affected loan rehabilitation; and (3) how Education oversees private collection agencies in implementing loan rehabilitation. GAO reviewed Education's policies, procedures and guidance; contracts and monitoring records for the defaulted loan information system contractor and 22 collection agencies; collections and rehabilitation data; and relevant federal laws and regulations. GAO interviewed Education officials, representatives of borrower advocacy groups, and visited 6 selected collection agencies, based on their loan volume and geographic location. GAO recommends that Education take steps to track loan rehabilitation performance data and improve oversight of its system contractor and collection agencies. Education agreed with GAO's recommendations. Appended are: (1) Comments from the Department of Education; and (2) GAO Contact and Staff Acknowledgments. [In addition to GAO contact, Melissa Emrey-Arras, individuals making key contributions to this report were: Debra Prescott, Assistant Director; Kurt Burgeson; Maria Gaona; and Jason Palmer. In addition, key support was provided by James Bennett, Deborah Bland, Jessica Botsford, Jason Bromberg, Timothy DiNapoli, Holly Dye, Hedieh Fusfield, Kristine Hassinger, Anne McDonough-Hughes, Melissa Jaynes, Lara Laufer, Charlene Lindsay, Jean McSween, Christie Motley, Kathryn O'Dea Lamas, Dae Park, David Perkins, Kenneth Rupar, Linda Sanders, Sylvia Schatz, Brian Schwartz, and Charles Youman.]
US Government Accountability Office. 441 G Street NW, Washington, DC 20548. Tel: 202-512-6000; Web site:
Publication Type: Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: US Government Accountability Office