The Office of the Federal Student Aid Education Department on Thursday announced a new plan to reform the student loan service system that oversees 35 million borrowers with federal student loans. Known as Unified Servicing and Data Solutions (USDS), the plan aims to facilitate access to student loan service providers and increase transparency between FSAs, borrowers, and loan service providers, complicating the long-running student loan service process.
Since 2016, the FSA has sought to restructure the student loan service experience. Service providers are the main source that provides information to borrowers on how to apply for assistance, enrollment in a loan repayment plan and search for loan status information. Each of the six loan providers contracted with the federal government operates its own website, complicating access to this information.
USDS aims to facilitate this process by facilitating access to all student loan service providers in line with the federal agreement through FSA-administered StudentAid.gov. In addition, FSA will increase accountability by ensuring that student loan service providers provide adequate customer service to borrowers through the implementation of new reporting metrics.
The FSA is currently evaluating proposals with loan providers to implement the targets set out in the USDS. These proposals will apply to the new service agreement between the FSA and the loan providers, which expires in December 2023.