Biden administration to review office responsible for FAFSA and student loans

The Education Department at the federal level is commencing a comprehensive review of the division responsible for managing college financial aid and the nation’s close to $2 trillion student loan portfolio. 

On Thursday, the agency disclosed that it has enlisted an independent consulting firm to deliver recommendations on enhancing the Federal Student Aid office. This office has come under bipartisan scrutiny this year due to the problematic revamp of the Free Application for Federal Student Aid, known as FAFSA. 

A congressional directive to simplify the form—essential for millions of high school and college students annually to secure federal aid for college—faced numerous glitches and errors initially. The Education Department now reports that forms are being processed within one to three days, and over 10 million forms have been submitted. 

Concerns Regarding Summer School:Several colleges are working urgently to ensure timely financial aid for students enrolled in the summer semester.

The flawed implementation strained colleges’ relationships with the federal government, leading Republican critics to allege that the Biden administration favored student loan relief to the detriment of its other obligations. Students from immigrant backgrounds were disproportionately affected by significant delays in the financial aid process this year. 

On Thursday, the Education Department announced a reorganization of reporting processes among its top leadership and a reassessment of contracts with external vendors. NBC News was the first toreport on this review. 

“These initiatives encompass leadership changes, heightened oversight and accountability, and involvement of diverse stakeholders to ensure that FSA functions optimally for our primary stakeholders—students and families,” stated Education Secretary Miguel Cardona in a memo to staff on Thursday. 

Cardona’s Testimony:Education Secretary Cardona expresses regret over FAFSA rollout amid fresh worries about the upcoming year.

Cardona also disclosed that Denise Carter, acting assistant secretary, will be appointed as the principal deputy chief operating officer at Federal Student Aid. The department is currently seeking a successor for Rich Cordray, who announced his resignation at the end of June. 

Cordray’s Departure:Key official in the Education Department exits amid turmoil surrounding college financial aid.

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