The Single Student Loan Servicer That Wasn’t

InsideHigherEd on the rapidly abandoned plan to consolidate all student loan servicing into a single monolithic “too-big-too-fail” mega contract:

DeVos has taken heat since May from members of Congress and representatives from the loan-servicing sector over the plan to pick a single servicer that would hire subcontractors to collect loan payments. Department officials at the time argued that the plan would make oversight of servicers by the government more efficient.

But the proposal found critics among both Republicans like Senator Roy Blunt of Missouri, who argued that the system would remove choice and competition, and Democrats like Massachusetts Senator Elizabeth Warren, who warned against creating a federal contractor “too big to fail.”

Blunt and Warren were part of a bipartisan group of senators who introduced legislation ahead of the department’s announcement Tuesday to block the single-servicer plan. Their bill would instead require the participation of multiple loan servicers.

Instead, 2019 will still see the consolidation of the different servicer websites to a single portal that interacts with the borrowers (which was the original Obama-era plan already in motion). Everything else will remain separate. How that will happen basically remains a mystery, but the site itself will be developed and managed by the Office of Federal Student Aid.

Hopefully, they don’t take any tips from Navient, because their website is singularly terrible.