This letter to the Department of Education offers Consumers Union’s input on plans to create a new education loan servicing system.

As the Department moves forward in selecting vendors and designing this new system, CU urges it to prioritize the following:

  • Specify enforceable conduct requirements in contracts with servicers performing back-office functions,working in consultation with other relevant state and federal enforcement agencies to ensure proper oversight.
  • Ensure that servicers performing back-office functions have training necessary to handle special populations, such as disability discharge applicants or public service employees, and tie compensation to quality of outcomes for those populations as well as general performance metrics.
  • Design a system that is consumer-tested, intuitive and easy to navigate.
  • Prepare communications as appropriate to minimize confusion as borrowers are transferred to the new system

The full letter is attached as a pdf.