More Student Loan Changes on the Horizon
James Runcie recently resigned from the position as head of the Education Department’s federal student aid program. His resignation letter mentioned that the Education Department is in talks to move responsibility of overseeing student debt to the Treasury Department. Ameritech Financial, a document preparation company that aligns clients with Department of Education repayment programs, is preparing for any changes in the way federal student loan debt is handled federally. They will continue to help borrowers enroll in available repayment plans through whatever federal department they are housed in.
James Runcie’s resignation comes soon after the president’s proposed budget calls for slashing the Department of Education budget by nearly 50 percent. Included in that cut is the possibility of transferring all or some of the student aid office’s responsibilities to the Treasury Department. Runcie expressed concern that a move like that “may provide some value but will certainly divert critical resources and increase operational risk in an increasingly challenging environment.”
“There have always been complaints about student loan debt and how the Department of Education handles it,” said Tom Knickerbocker, Executive Vice President at Ameritech Financial. “From lack of communication to difficulty getting into repayment programs, there are always going to be complaints.”
The Department of Education currently houses $1.4 trillion in student loan debt, more than some bank portfolios. Proponents of the move not only see the Treasury Department as a more appropriate home for such a large portfolio but also cite current challenges in federal student aid repayment programs. Borrowers are increasingly using income-based repayment plans, which require information on their earnings that the IRS has. Moving federal student aid to the same department as the IRS could simplify and streamline the process of enrolling and re-certifying in those programs, especially considering that the data retrieval tool has been down.
Critics of the move are worried that the Treasury Department won’t work in the best interest of the borrowers because their mission is to pay for the business of government, which does not currently align with the Department of Education’s mission to increase educational opportunities. Critics, including Runcie who said in his resignation letter that he requested additional staff to help with pressing projects, are worried about a lack of adequate resources to handle the Department of Education’s growing responsibilities.
“Moving the agency that is supposed to provide stewardship for student loan borrowers to an agency that is working on a shoestring with a skeletal crew strikes me as a recipe for a policy disaster,” said Sarah Bloom Raskin, former deputy Treasury Secretary under President Obama.
For those wondering how the Treasury Department might fare with some of the Department of Education’s responsibilities, they did an experiment recently in which they attempted to collect student loan debt and educate borrowers on repayment options. They failed on both accounts and were outperformed by private collectors.
“We don’t know what’s going to happen with the Department of Education or the student loan debt problem, but that doesn’t change our mission,” said Knickerbocker. “Ameritech Financial will always work in the best interest of our clients to help them get into federal repayment plans that work for their financial situation. We’re not going anywhere.”
About Ameritech Financial
Ameritech Financial is located in El Dorado Hills, California, right next to the California state capitol, Sacramento. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation for federal student loan forgiveness programs offered through the Department of Education.
Each representative on the phone is certified through the International Association of Professional Debt Arbitrators (IAPDA) and has received the Certified Student Loan Professional certification through Association for Student Loan Relief (AFSLR).
Ameritech Financial prides themselves on their exceptional 24/7 Customer Service.
SOURCE Ameritech Financial
