The company that rejected 99 percent of applicants for public-service loan forgiveness is leaning on political contacts as it comes under fire.
The company that rejected all but 1 percent of applicants for a popular federal student-loan forgiveness plan — and that manages nearly a third of the nation’s $1.6 trillion of student loan debt — is beefing up its already close ties to President Donald Trump and Education Secretary Betsy DeVos as it competes for a new contract.
The company, FedLoan Servicing, an arm of the Pennsylvania Higher Education Assistance Agency, has been at the center of the growing dispute over why tens of thousands of teachers, public-sector employees and nonprofit charity workers who expected to have their loans wiped out are being denied the benefit. The company has drawn the ire of government watchdogs, state attorneys general and congressional Democrats. And a trove of documents obtained by POLITICO show that Education Department officials, too, have raised serious questions about its performance over the years.
Nonetheless, as its $1.3 billion, 10-year contract expires in December, the loan servicing behemoth will be able to draw on unusually close ties to the administration as it seeks more government business — a fact that has its critics crying foul and citing it as a symbol of revolving-door abuses in the federal government.