Richard Cordray Publishes Federal Guidelines on Student Aid for …
The United States Department of Education’s Federal Student Aid (FSA) Office, under the direction of COO Richard Cordray, has released updated guidelines for providers establishing procedures for handling claims recording and data received by FSA providers.
The change is designed to “make it easier for attorneys general and state regulators to get the information they need from the FSA and the companies that work for us to manage and administer federal student loans,” Cordray wrote in a blog post.
“These guidelines also establish a streamlined and expedited process for reviewing applications from federal, state, local, tribal and territorial government agencies and financial regulators,” Cordray said. “The department believes this change will allow the FSA to collaborate and coordinate more effectively with our partners, including state attorneys general and federal and state financial regulators, as they engage in vital oversight of our suppliers by facilitating access to the data they need. “
For federal student loan services under contract with the ministry, the guidelines provide new processes for handling inquiries from state regulators.
“In 2017, the FSA issued a memo, which some call the ‘Bradfield Memo’. He told the loan service companies that work for the FSA that if a state attorney general asks them for information, they should send the request to us before releasing anything, ”Cordray said. “When these requests came in, the FSA usually turned them down, forcing states to sue the FSA and our loan officers to get the information they needed. This note, coupled with repeated denials, prevented states from getting the straightforward information they needed to protect their residents by ensuring they received the best advice from our loan officers. Instead of finding reasons to deny these requests, we should spend our time partnering with state agencies to effectively oversee our loan officers and debt collectors. “
In the blog post, Cordray also said that the FSA’s partnerships with agencies such as the Consumer Financial Protection Bureau, where he served as a director under the Obama administration to conduct joint surveillance and surveillance reviews, will continue. .
“To effectively conduct these joint oversight and oversight reviews, our interagency partners must have streamlined access to departmental records and data when such access is permitted by applicable laws and policies,” Cordray wrote.
Read the full instructions from the FSA provider here.