NAICU Washington Update

Education Department Moves Forward on Student Complaint Database

February 11, 2016

The U.S. Department of Education is moving forward on a plan to create a centralized database to collect complaints and feedback from students and borrowers. The initiative, called the Enterprise Complaint System, is intended to be “a simple and straightforward way to file complaints and provide feedback about federal student loan lenders, servicers, collections agencies, and institutions of higher education.” 

Traditionally, consumer complaints have been aggregated and resolved by the states.  Recently, the Department of Education created the Federal Student Aid Ombudsman Group which is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans.

The interaction the new federal database will have with state agencies is unclear.  Further questions about the nature of the complaint system, including the public disclosure of the complaints, the role that the federal government will take in remedying the complaints, the linkages between the federal database and state consumer protection agencies, and the future of the ombudsman role also remain unanswered at this time. 

The idea for a centralized complaint database grew from President Obama’s Student Aid Bill of Rights, released in March 2015.  The Department has charged Federal Student Aid with the development and oversight of this new database, scheduled to launch on July 1.

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