G.A.O. Study Cites Loose Oversight of College Loans

Given that this administration has demonstated little but overall incompetence and, in particular, callousness toward low and moderate income citizens, this scandal shouldn't be surprising -- but I confess to being shocked nevertheless.  I can think of only one area -- education -- in which I agree with the direction this administration has taken (I actually agreed with virtually everything President Bush said when I saw him speak at the Village Academy charter school a few months ago!), and now this.  Sigh...

The federal Department of Education, after months of criticism for lax  oversight of the student loan <http://topics.nytimes.com/top/reference/timestopics/subjects/s/student_loans/index.html?inline=nyt-classifier>  program, still has no system to detect  and uncover misconduct by lenders and protect student borrowers, a new  government report said yesterday.
 
The report, by the Government Accountability Office <http://topics.nytimes.com/top/reference/timestopics/organizations/g/government_accountability_office/index.html?inline=nyt-org>  and released by  Congressional Democrats, found that the department had “no oversight tools” to  see whether lenders were giving improper incentives to colleges to steer  student borrowers their way, and, that since 1989, the department had offered  lenders no “comprehensive guidance” on what incentives might be forbidden. In  20 years, the report found, the department has tried to punish only two  lenders for violating government rules.
 
The department does not have a way to find out whether universities are  improperly limiting students’ choice of lenders, according to the G.A.O., the  government’s main research arm.
 
The report, the agency’s first since revelations of potential misconduct in  student lending this year, said the department’s lack of oversight of federal  student loans “may have resulted in some students taking loans with higher  interest rates or fewer borrower benefits.” Over all, the report portrays an  agency that may at times react to outside complaints, but does not  “proactively detect” problems.