Today, the U.S. Department of Education formally amended Phase II of the federal student loan servicing solicitation. The amendment maintains superior customer service and key borrower protections while ensuring the project stays on budget, saving taxpayers more than $130 million over the next five years. The amendment further clarifies the Department’s expectations of the eventual servicer and formally lists all requirements in the solicitation.
U.S. Secretary of Education Betsy DeVos issued the following statement on the new amendment:
“From day one, my priority as Secretary of Education has been to put students’ needs first. This amended solicitation does just that. It maintains superior customer service and borrower protections while increasing oversight and protecting taxpayers.
“The federal student loan servicing solicitation we inherited was cumbersome and confusing—with shifting deadlines, changing requirements and de-facto regulations that at times contradicted themselves. Internal and external stakeholders both agreed it was destined for a massive and unsustainable budget overrun.
“In order to ensure the best outcome for federal student loan borrowers, it was necessary to rescind the previous guidance to free the Department to craft a solution that was more responsive to the needs of both customers and taxpayers.
“With changes in the new amendment, we have simplified the process to ensure meaningful borrower protections while saving taxpayers more than $130 million over the next five years. Savings are expected to increase significantly over the life of the contract. Borrowers can expect to see a more user-friendly loan servicing interface, shorter email and call response times and an improved payment application method that will maximize the benefit of each payment the borrower makes. Our amendment makes no changes to repayment plan requirements.
“I am committed to helping students meet their repayment obligations and reaching their academic…