‘Giving More to Get More Back’
The U.S. Department of Education should take part of the responsibility for the large numbers of people failing to repay student loans. The U.S. General Accounting Office report released in August revealed that the Department of Education had never reviewed the 47 guaranty agencies’ standards for lenders’ use in collecting loans and filing insurance claims. According to the GAO report the standards were not followed and lacked enforcement procedures.
The ineffectiveness of the Department of Education was noted in one of the GAO Report’s principal findings: “Although federal regulations require the Department of Education to approve collection and claims standards for all guaranty agencies, only nine of 47 agencies’ standards had been reviewed and approved. Nonetheless, the 47 agencies received a total of about $1.3 billion in reinsurance payments from the Department in fiscal year 1986.” I agree with the GAO recommendation that the Department of Education should develop and implement an effective guaranty agency review process.
REED MARKHAM
Alta Loma
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