It's a question that I get asked all the time: How well are borrowers in the Direct Lending program being served today? So, on August 20th, I emailed the Department of Education the following FOIA request:
Seems kinda simple, right? I got my answer this week, which included the following paragraph (FOIA's version of the dreaded "Dear John" letter):
So, I guess it will be left unanswered as to how well students are being served by the current DL loan servicer, ACS (one can make assumptions based on the fact that they were the only one of the five finalists not selected). Given that 100% of federal loans will be serviced by four outside contractors, starting in July 2010, does that mean that the all-important annual evaluations, which will be used to allocate loans to these servicers, will also remain out of the public eye? Doesn't the public deserve to know how servicers are faring based on public disclosure of default rates and customer survey scores from students, financial aid offices and the FSA, which will determine their allocation. This lack of transparency is astounding. I hope this policy changes.