GAO Urges Education Department to Formalize Servicer Coordination Standards

The U.S. The Government Accountability Office released a report examining how the Department of Education coordinates with federal student loan servicers when implementing program changes. GAO found that all four servicers it reviewed experienced challenges stemming from unclear or incomplete instructions, sometimes requiring multiple rounds of clarification that delayed implementation. While the Department of Education recently increased early coordination with servicers, GAO found that the agency lacks formal criteria for early servicer engagement, particularly for complex changes or those involving tight implementation timelines. The Department disagreed with the recommendation, arguing that formal criteria could limit its flexibility and ability to respond quickly to changing administration priorities.