A report by the Government Accountability Office has taken the Department of Education to task for insufficient oversight of the student-loan system.
The GAO, the investigative arm of Congress, found in a report released Aug. 1 that, after months of scrutiny into lenders’ questionable arrangements with college financial-aid offices, the Education Department still “has no oversight tools in place designed to proactively detect … lenders providing improper inducements.”
The House and the Senate recently passed differing versions of legislation that would set limits on student-loan practices, but such bills must be reconciled before they can be sent to President Bush.
In a conference call with reporters on Aug. 9, Secretary of Education Margaret Spellings called the GAO report “basically kind of old news in many ways.”
The department supports reform of the existing system, which she called broken, and is continuing to investigate suspect lending relationships, Ms. Spellings said.
“I can assure you that we will act accordingly when we find misdeeds or wrongdoing,” she said.
