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Government watchdogs criticized the Office of Federal Student Aid, in charge of managing more than $1 trillion in federal student loans and grants, for inadequate communications with borrowers, colleges and loan servicing companies, raising questions from lawmakers about the division's ability to continue administering the programs.

The Government Accountability Office on Wednesday chided the FSA, which issues subsidized, unsubsidized and Plus loans, for lax oversight and "absent, unclear and inconsistent guidance" to schools receiving aid and student loan servicers. In a joint House hearing, the GAO detailed "key weaknesses" at the FSA that has trickled down to servicers "resulting in inconsistent and inefficient services to borrowers."

The GAO found servicers have not been given clear instructions on how to apply over or under payments and there is no clarification about how to handle reporting to credit agencies. The GAO suggested the department create a detailed manual for servicers, among other things.

While FSA chief James Runcie vowed to make changes to address issues raised by the GAO, Rep. Virginia Foxx, R-N.C, ripped into Runcie saying, "It is clear the FSA cannot administer this program" because it is far too complex.

"It appears there is a lot of blame being foisted upon the servicers. That's not where the problem is. The problem is with the leadership with the FSA. If you gave clear guidelines to the servicers, if you did things in a timely fashion, we would not have this problem," said Foxx, chairwoman of the House subcommittee on higher education and workforce training. "You are harming the people you are supposed to be helping."

http://www.upi.com/Top_News/US/2015/11/19/Government-watchdog-blasts-Federal-Student-Aid-office-for-shoddy-oversight/5251447954654/