December 22, 2023 - On Thursday, Rep. Katie Porter (D-CA) released a new report analyzing how the Department of Education has a structural conflict of interest in its dual role as both a lender and representative for student borrowers. Over several months, her office investigated the student loan servicing industry and documented a substantial need for stronger oversight and transparency.

Click HERE to read Rep. Porter’s report, Checks and Balances in the Federal Student Loan System.

“Students loan borrowers deserve a strong advocate they can trust to work in their best interests,” said Congresswoman Porter. “As my report reveals, the Department of Education’s conflicting priorities have led to poor customer service, inaccurate information, and harmful practices in the student loan servicing industry—threatening long-term financial harm to millions of borrowers. More oversight is needed to safeguard student loan borrowers and create a more just system of loan repayment.”

For years, student loan servicers have failed to meet their contractual obligations, Porter’s report found. Poor customer service, miscalculations, inadequate communication, and lengthy delays are well-documented in the loan servicing industry. Despite the harmful consequences these failures have on borrowers, the Department of Education hasn’t historically held servicers accountable.

Porter has worked on legislation to empower an independent agency, the Consumer Financial Protection Bureau (CFPB), to conduct oversight over student loan servicers. The CFPB Student Loan Integrity and Transparency Act would increase information-sharing between the CFPB and Department of Education and give the CFPB more tools to protect student borrowers.

Read more about the need for oversight in Rep. Porter’s report, Checks and Balances in the Federal Student Loan System, HERE.

Congresswoman Porter has long championed the need for more oversight to protect students and hold schools, corporations, and the government accountable for abusive practices. When payments for student loans resumed earlier this year, Rep. Porter released a Return to Repayment guide to help borrowers understand how this could affect their loans. Congresswoman Porter has also introduced legislation to prevent universities from manipulating student loan default data and hold institutions with high rates of default accountable. Earlier this year, she wrote to MOHELA, a major student loan servicer, to demand answers about the company’s shoddy customer service and mismanagement. 
Source: Congresswoman Katie Porter