
ED Revamps Ombudsman Office to Focus on Financial Literacy
The federal student loan portfolio is nearing $1.7 trillion.
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The Department of Education said Friday that an office responsible for handling borrower complaints will now also to focus on providing students and families with information about the benefits and risks of college loans.
The aim of the newly renamed Office of Consumer Education and Ombudsman is to better equip students, families and borrowers “to make careful borrowing decisions and responsibly manage their federal student loan debt,” the department said. The office will still respond to borrower complaints.
The department cited the growing student loan portfolio, which now totals nearly $1.7 trillion, and high default rates as reasons for revamping the ombudsman’s office.
Ombudsman staff will also develop a new manual for all direct loan-collection practices and policies in an effort to improve accountability measures and strengthen oversight of third-party servicers.
“This change marks a shift toward earlier and more comprehensive engagement with families, ensuring they understand both the opportunities and potential risks of taking on federal student debt before they borrow,” Under Secretary Nicholas Kent said in a news release about the change. “By providing clearer guidance and support at the front end of the college journey, we believe students will make more informed decisions that lead to lower debt burdens, stronger repayment outcomes, and greater satisfaction with their educational investment.”
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