SCHOOL OF HARD KNOCKS: FEDERAL STUDENT LOAN SERVICING AND THE LOOMING FEDERAL STUDENT LOAN CRISIS

With an estimated one in four borrowers struggling to repay their federal student loans or already in default, the federal student lending program is on the precipice of collapse. Rates of delinquency and default are continuing to rise due to the fractured statutory and regulatory framework enacted by the federal government. Although critics are quick to blame federal student loan servicers for the failings inherent within the federal student loan program, such misplaced blame obfuscates the true problems underpinning the federal student loan program as a whole: the Department of Education's convoluted regulations and contractual obligations, the unnecessarily complex statutory and regulatory framework, and competing oversight exercised by multiple federal agencies and the individual states.