Dept Ed Ignores Own IG Report on Student Loans

[flashl]

U.S. Ignores Finding on Student Lender

The Education Department has brushed aside a finding by its own inspector general that a student lender improperly received $34 million in federal subsidies, and is instructing the lender to decide for itself how much money it should pay back.

In a letter sent Friday to the Pennsylvania Higher Education Assistance Agency, a state-owned company that makes and guarantees student loans, the department said it had estimated the overpayment at only $15.1 million, and said in a separate letter that it agreed with only some of the findings of the inspector general. But it told the agency to calculate for itself the amount it thought it had overbilled the government. Any final payment would require the approval of the Education Department.

The agency “must provide a detailed explanation of its plan to identify affected loans and to calculate overpayments,” which would be deducted from future reimbursement requests, wrote Patricia Trubia, a department official, in the letter.

Keith New, a spokesman for the Pennsylvania agency, said it was “very pleased” with the department’s letter, and that it would continue to negotiate with the department over any repayment obligation.

NY Times