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COMMENTARY: Education Department helps loan servicers instead of borrowers

NNPA NEWSWIRE — …a newly-released audit report finds fault with how the Department of Education (Department) is managing both its loan funds and its 15 contract student loan servicers. According to an Office of Inspector General (OIG) report released on February 12, “borrowers might not have been protected from poor services, and taxpayers might not have been protected from improper payments.”

Published

8 years ago

April 5, 2019

Oakland Post

By Charlene Crowell, NNPA Newswire Contributor

In an increasingly competitive global economy, highly skilled workers have a sharp advantage in securing and keeping employment. And as technological advances result in life-long learning in many occupations, many worker-students turn to federal student aid, the largest source of funding for higher education, to expand and/or hone their value in the marketplace.

But a newly-released audit report finds fault with how the Department of Education (Department) is managing both its loan funds and its 15 contract student loan servicers. According to an Office of Inspector General (OIG) report released on February 12, “borrowers might not have been protected from poor services, and taxpayers might not have been protected from improper payments.”

That statement covers a range of student loan concerns and include loan payments, loan consolidation, principal and interest payments and repayment options like income-driven repayment plans and forbearance. But its content takes direct aim at the Federal Student Aid (AID) division of the Department, charged with being a thrifty steward of the billions of dollars dedicated to higher education.

Could it be that the current student loan crisis is facing the same threat today that was rampant a decade ago during the mortgage crisis? Are borrowers’ payments being properly applied? Or are unchecked and unaccountable loan servicers bilking consumers into unwarranted costs and payments?

I’m betting that the 44 million borrowers who together owe more than $1.4 trillion in student loan debt seriously want to know.

“FSA’s not holding servicers accountable could lead to servicers being paid more than they should be (the contracts with servicers allow FSA to recover amounts paid for loans not serviced in compliance with requirements),” states the report.

“FSA management rarely used available contract accountability provisions to hold servicers accountable for instances of noncompliance,” continued the report. “By not holding servicers accountable for instances of noncompliance with Federal loan servicing requirements, FSA did not provide servicers with an incentive to take actions to mitigate the risk of continued servicer noncompliance that could harm students.”

According to OIG, all student loan servicer contracts are supposed to be awarded on the basis of performance measures in five weighted areas. Two factors, borrower satisfaction and the percentage of borrowers who were not more than five days delinquent, together account for up to 60 of the contractors overall score. Servicers are also evaluated on the percentage of borrowers whose loans were more than 90 days late but less than 271, and a percentage who were more than 270 days delinquent but less than 361, and an FSA employee satisfaction survey.

Although the Department has 15 student loan servicer contracts, four were the biggest beneficiaries during the OIG’s audit period. As of September 30, 2017, federal student loan debt was $1.147 trillion with 93 percent of those loans assigned to PHEAA ($319 billion), Great Lakes ($236 billion), Navient ($215 billion), and Nelnet ($180 billion).

In February 2017, the Consumer Financial Protection Bureau (CFPB) sued Navient Corporation and two of its subsidiaries for allegedly using shortcuts and deception to illegally cheat 12 million borrowers out of their rights to lower loan repayments. These practices, according to CFPB, led to an additional $4 billion in borrower costs.

Much of the unnecessary costs were the result of Navient’s widespread use of forbearance that boosted corporate profits by minimizing time spent advising distressed borrowers. For example, three-years of deferment on $30,000 in student loans would cost a borrower an additional $6,742.

Navient also had another dubious distinction. In 2017, more consumers filed complaints about Navient than any other student loan servicer. Complainants identified dealing with the servicer or lender as the key issue, compared to only 34 percent whose problems were based on an inability to pay their loans.

“The Inspector General’s damning revelations that the Department of Education failed to track all instances of non-compliance or to hold servicers accountable for errors demonstrates its lack of commitment to protecting student loan borrowers,”, said Persis Yu, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “Unfortunately, this revelation is consistent with the Department’s prior actions, which have repeatedly put the interests of big business ahead of the interests of student loan borrowers.

Many consumer advocates would agree with the Trump Administration’s mounting actions that favor businesses before consumers. The recently-announced rule reversal on payday loans is another example. In 2018, guidance that protected people of color from discrimination in auto loan financing is yet another.

“Policies and practices must assure student success while minimizing costly debt errors that become unnecessary burdens,” said Whitney Barkley-Denney, a policy counsel with the Center for Responsible Lending.

“In this past year, Department of Education has justified its aggressive steps to shield student loan servicers from liability by claiming that it rigorously oversees its servicers,” added Yu. “This report from the Inspector General demonstrates that claim is false.”

Charlene Crowell is the Center for Responsible Lending’s communications deputy director. She can be reached at Charlene.crowell@responsiblelending.org.

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Smooth Ride! Car Suspension & Comfort Tested #shorts

Smooth suspension meets surprisingly spacious legroom. Experience true comfort on any road!

Published

1 month ago

October 4, 2026

Oakland Post

Car suspension test demonstrating a smooth ride, comfort features, and handling on various terrains.

Experience the difference smooth suspension makes on rough streets. Check out the surprisingly good second-row legroom – test it yourself for true comfort.

Watch the full video: https://youtu.be/l9Z571za5Gc

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61 years since Selma, Houston leaders say the bridge remains to be crossed

61 years after Selma, Houston leaders say the fight for equality continues. The issues that sparked the marches still impact Black Americans today.

Published

1 month ago

October 4, 2026

Oakland Post

Houston leaders discuss the ongoing struggle for civil rights 61 years after Selma, emphasizing the need for continued action.

It has been 61 years since the Selma marches. But political leaders in Houston say that the issues protesters were marching for still plague the lives of Black Americans.

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Here is what you need to know about finding unique white elephant gift ideas that everyone wants to steal

The best white elephant gift ideas are funny enough to get a reaction but useful enough that people actually want to steal them. Look for gifts with a surprise factor, broad appeal, an inside joke, and just enough personality to spark some friendly competition. The wrapping paper comes off, the room goes quiet for half […]

Published

1 month ago

October 4, 2026

Oakland Post

The best white elephant gift ideas are funny enough to get a reaction but useful enough that people actually want to steal them. Look for gifts with a surprise factor, broad appeal, an inside joke, and just enough personality to spark some friendly competition.

The wrapping paper comes off, the room goes quiet for half a second, and suddenly everyone wants the same gift. That is the sweet spot. A great white elephant pick should make people laugh, lean in, and start plotting their next steal before the turn is even over.

Should a White Elephant Gift Be Funny or Useful?

A white elephant gift can be funny or useful, but the strongest choices usually give people a reason to laugh and a reason to keep the item. A practical gift with an odd design, unexpected feature, or playful theme can get a reaction without becoming something the recipient immediately wants to give away.

The right balance depends on the group. Close friends and family members may enjoy a ridiculous gag gift because they already understand one another’s sense of humor.

A workplace exchange, neighborhood party, or mixed-age gathering usually calls for something with broader appeal. In those settings, humor works better when it is built into an item people could still use afterward.

It also helps to think about how quickly the gift will make sense once it is opened. A strangely shaped kitchen tool, oversized mug, quirky desk accessory, or unexpectedly fancy everyday item can create an immediate reaction. Guests understand the joke right away, while the item still has enough practical value to attract a steal.

Pure gag gifts can be harder to pull off. Something that exists only for the punchline may get a big laugh during the reveal and then sit untouched for the rest of the game. If the goal is to bring one of the gifts everyone keeps fighting over, usefulness gives the joke staying power.

Memorable Present Ideas: Creating Inside Joke Gifts

Inside joke gifts can make a white elephant exchange feel much more personal, especially when most of the group shares the same stories. The trick is choosing a reference that people will recognize quickly instead of building the entire joke around something only two guests understand.

You can turn a memorable vacation mishap, office catchphrase, family story, or long-running group joke into the theme of the gift. A personalized comic book can work especially well when it turns familiar people or a ridiculous shared moment into part of the story.

Think carefully about who the joke involves before ordering anything permanent. The gift should make the person feel included in the fun, not singled out for the wrong reason.

Can You Bring Something You Already Own?

Holiday gift exchanges can be a good place to re-gift something you never used, especially if it is unopened and clean.

The following can all work if they still look presentable:

A duplicate kitchen gadget
An untouched game
A decorative item
A sealed gift set
An unopened candle
A new travel accessory

The goal is to give the item a second chance, not use the exchange as an excuse to clear out damaged or unwanted clutter.

Take a close look at the packaging before wrapping it. Faded boxes, missing pieces, visible wear, or anything that looks obviously used can make the gift feel careless.

Wrapping Budget-Friendly Gifts

Wrapping can make gifts more entertaining before anyone even knows what’s inside.

Misdirection works especially well for fun party games. Put a small gift inside a much larger box. Use packaging from an unrelated household item.

Add harmless weight so guests cannot guess what they are holding. The reveal becomes part of the joke without changing the gift itself.

You can also lean into the theme of the exchange. Bright paper, oversized bows, reusable bags, or deliberately over-the-top wrapping can make an ordinary item feel more memorable. If the gift itself is already funny, simple wrapping may work better so the surprise stays hidden until the last second.

Frequently Asked Questions

Is Picking Last an Advantage in White Elephant?

Picking last can be an advantage because you get to see almost every gift before making your move. Instead of choosing blindly from the remaining wrapped presents, you can steal something that has already caught your attention if the rules still allow it.

That advantage depends on the house rules. Some games limit how many times a gift can be stolen.

Others lock an item once it reaches a certain number of steals. If the most popular gifts are already unavailable, the final player may have fewer strong options than expected.

The first player can also get another turn at the end in some versions of the game. That rule can balance things out, since the person who started with the least information may get one final chance to steal.

How Do You Plan White Elephant for a Large Group?

For a large white elephant exchange, set a firm spending limit and establish the stealing rules in advance.

Create a clear turn order before the game begins. Drawing numbers as guests arrive can save time once everyone is ready to start.

Keep the number of steals per gift limited so the game does not drag on. It also helps to have one person track which creative holiday presents have been stolen and when they are locked, especially if dozens of people are participating.

Can You Play White Elephant Virtually?

A virtual white elephant exchange can work over a video call, with one person keeping track of the turn order and each steal. Guests can either mail physical gifts ahead of time or use digital gifts that can be delivered once the game ends.

Set the spending limit and stealing rules before everyone joins. It also helps to decide how gifts will be revealed and who is responsible for sending each one afterward so the exchange does not become confusing.