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    Subject Term: "Loan repayments"

    8 publications with a total of 21 open recommendations including 4 priority recommendations
    Director: Yvonne D. Jones
    Phone: (202) 512-2717

    3 open recommendations
    Recommendation: The Director of OPM, together with the CHCO Council, should track government-wide data to establish a baseline and analyze the extent to which the seven Title 5 special payment authorities are effective in improving employee recruitment and retention, and determine what potential changes may be needed to improve the seven authorities' effectiveness. (Recommendation 1)

    Agency: Office of Personnel Management
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Director of OPM, together with the CHCO Council, should provide guidance on assessing effectiveness and tools--such as best practices or frequently asked questions--for the range of Title 5 special payment authorities. (Recommendation 2)

    Agency: Office of Personnel Management
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Director of OPM should establish documented procedures to assess special payment authority requests requiring OPM approval and periodically review approval procedures to consider ways to streamline them. (Recommendation 3)

    Agency: Office of Personnel Management
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    6 open recommendations
    including 2 priority recommendations
    Recommendation: The Secretary of Education should assess and improve, as necessary, the quality of data and methods used to forecast borrower incomes, and revise the forecasting method to account for inflation in estimates.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed to assess and improve its borrower income forecasts. The agency reported that it is working with Treasury and other federal partners to obtain the best income data while ensuring that taxpayer privacy is protected to the full extent of the law. Education noted it will establish a timeframe for improvements to the IDR model that allows for adequate and thorough analysis and quality control. It will also consider including an adjustment for inflation in our income estimates and will document the results of our analysis for the next version of the IDR model. The agency wants to guarantee that an inflation adjustment is appropriate for this subpopulation of IDR borrowers, therefore they will conduct further analysis to ensure that any inflation adjustment is appropriately incorporated into the model. The agency anticipates completing these efforts by September 29, 2017. When these efforts are complete, GAO will await documentation that Education has assessed and improved the quality of data quality and methods it uses to forecast borrower incomes, and that it has revised its forecasting methods to account for inflation.
    Recommendation: The Secretary of Education should obtain data needed to assess the impact of income recertification lapses on borrower payment amounts, and adjust estimated borrower repayment patterns as necessary.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed to attempt to obtain data to assess the impact of income recertification lapses on borrower payment amounts. The agency reported that it started to collect more detailed information on borrowers who fail to recertify their income. It will analyze these data to see if they can be used to adjust borrower repayment patterns in the model. The agency will also consider whether to include behavioral effects to account for targeted borrower outreach to recertify their income. GAO will monitor the progress of these efforts. Education expects to complete these efforts by September 29, 2017. At that time, GAO will await documentation that Education has obtained the necessary data to assess the impact of recertification lapses on borrower repayment patterns and adjusted estimated borrower repayments in its model, as necessary.
    Recommendation: The Secretary of Education should complete efforts to incorporate repayment plan switching into the agency's redesigned student loan model, and conduct testing to help ensure that the model produces estimates that reasonably reflect trends in Income-Driven Repayment plan participation.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to incorporate repayment plan switching into its redesigned student loan model, and reiterated that efforts to incorporate this capability had begun despite challenges inherent in predicting borrower behavior. GAO will monitor the progress of these efforts.
    Recommendation: The Secretary of Education should, as a part of the agency's ongoing student loan model redesign efforts, add the capability to produce separate cost estimates for each Income-Driven Repayment plan and more accurately reflect likely repayment patterns for each type of loan eligible for these plans.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education asserted that as they redesign its current cost estimation model, it will consider adding the capability to produce separate cost estimates for each IDR plan and allow for separate, more accurate estimates by loan type.
    Recommendation: The Secretary of Education should more thoroughly test the agency's approach to estimating Income-Driven Repayment plan costs, including by conducting more comprehensive sensitivity analysis on key assumptions and adjusting those assumptions (such as the agency's Public Service Loan Forgiveness participation assumption) to ensure reasonableness.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to test its approach to estimating IDR plan costs more thoroughly, including through more comprehensive sensitivity analysis. The agency included in its FY16 Annual Financial Report, sensitivity analyses for Public Service Loan Forgiveness participation and borrower incomes. In the future, the agency will consider conducting additional sensitivity to analyses as well as other kind of analysis to ensure reasonableness. GAO will consider closing this recommendation when the agency has completed these efforts.
    Recommendation: The Secretary of Education should publish more detailed Income Driven Repayment plan cost information-- beyond what is regularly provided through the President's budget--including items such as total estimated costs, sensitivity analysis results, key limitations, and expected forgiveness amounts.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to publish more detailed IDR plan cost information and stated that it plans to present sensitivity analysis results and key limitations in upcoming financial reports. GAO will consider closing this requirement when the agency has completed this effort.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    3 open recommendations
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should develop a minimum standard that specifies core call center operating hours to provide borrowers, including those on the West Coast, with improved access to servicers.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to establish core hours in the requirements for servicers to help borrowers access live customer service representatives. Education also noted that borrowers can use interactive voice response and web technology to access information from their servicers during periods when live operators are not available. While these are additional tools for borrowers, they do not replace the need for access to live representatives, and, as we note in the report, Education's customer satisfaction surveys of borrowers in 2014 and 2015 raised concerns about the usefulness of servicers' automated voice response systems. Establishing core call center hours in servicer requirements, if implemented as Education described, would meet the intent of the recommendation.
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should ensure the new unified borrower complaint tracking system includes comprehensive and comparable information on the nature and status of borrower complaints made to both Education and servicers, to allow Education to track trends and better manage the program to effectively meet borrower needs.

    Agency: Department of Education
    Status: Open

    Comments: Education reported that it will conduct communication and awareness campaigns to ensure borrowers know of the existence and purpose of the feedback system, which includes comprehensive and comparable information on the nature and status of borrower complaints about servicers. One of the communication channels used will be through the servicers. In addition, the agency reported that it will establish a common borrower experience and common branding in the requirements for the ongoing student loan servicing solicitation by, among other things, requiring the creation of a single web portal clearly labeled as representing the agency. Through that system, all borrowers will be ale to access information, make payments, apply for benefits and manage their accounts. When implemented, this new platform, in conjunction with FSA's Feedback System, will collect complaint information at FSA comprehensively.
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should evaluate and make needed adjustments to Direct Loan servicer performance metrics and compensation to improve assessment, including using baseline data, and alignment with Federal Student Aid's strategic goals aimed at superior customer service and program integrity, and to ensure that the assignment of new loans to servicers takes program compliance into account.

    Agency: Department of Education
    Status: Open

    Comments: Education stated that it would evaluate existing and alternative performance metrics and compensation strategies as part of the ongoing student loan servicing procurement. The agency noted that the results of this evaluation, along with information gleaned form other market research conducted in the context of the procurement and proposals submitted by prospective vendors, will be reflected in future servicing contracts.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    1 open recommendations
    including 1 priority recommendation
    Recommendation: To strengthen management of the Direct Loan Program and ensure good customer service for borrowers, the Secretary of Education should direct the Office of Federal Student Aid's Chief Operating Officer to review its methods of providing instructions and guidance to servicers, identifying areas to improve clarity and sufficiency, and ensure consistent delivery of instructions and guidance to ensure program integrity and improve service to borrowers. For example, the Department could consider implementing a detailed, common servicing manual for the Direct Loan program.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed with this recommendation and has reviewed its guidance to servicers, as of October 2016. It has issued clarifications to servicers in several areas. In addition, the Department had been in the process of an acquisition for a new loan servicing solution but, as of September 2017, is reassessing its acquisition strategy. While the plan for the revised acquisition is not finalized, FSA expects its approach to significantly streamline the process of communicating instructions and guidance to servicers, as well as improve the overall experience for students and borrowers. Upon resolution of its acquisition strategy, Education needs to demonstrate that its final contract for a new loan servicing solution is structured to provide clear and consistent instructions and guidance to servicers to ensure program integrity and improve service to borrowers.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    1 open recommendations
    Recommendation: To help ensure that Income-Based Repayment, Pay As You Earn, and Public Service Loan Forgiveness serve their intended beneficiaries to the greatest extent possible, the Secretary of Education should take steps to consistently and regularly notify all borrowers who have entered repayment of income-driven repayment plan options, including Income-Based Repayment and Pay As You Earn.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education generally concurred with our recommendation, stating that it is committed to ensuring that federal student loan borrowers have the information they need to manage their debt, including details regarding income-driven repayment plans and loan forgiveness programs. However, Education stated that it is not clear that providing information on repayment options to all borrowers is the most efficient or effective way to achieve this goal. Beginning in 2015, Education directed its loan servicers to start sending detailed income-driven repayment information, such as projected monthly payment amounts and total amounts paid over the life of the loan under each plan, on a quarterly basis to all borrowers who are in school or in the 6-month grace period after leaving school. Education reported that in 2016 its loan servicers also began sending an email to borrowers in the fifth month of their grace period with information about applying for income-driven repayment plans and Public Service Loan Forgiveness. Education also reported that in December 2016 it began sending emails about the Revised Pay As You Earn plan directly to certain groups of borrowers, including those who expressed interest in income-driven plans during exit counseling, were less than 227 days delinquent, or had Federal Family Education Loans. While these are positive steps, we maintain it is important for Education to notify all borrowers in repayment of these options to support its goal to provide superior information and service to borrowers.
    Director: Frank Rusco
    Phone: (202) 512-3841

    1 open recommendations
    Recommendation: To provide greater assurance that DOE is effectively monitoring its loans, the Secretary of Energy should direct the Executive Director of the Loan Programs Office to fully develop its organizational structure by staffing key monitoring positions.

    Agency: Department of Energy
    Status: Open

    Comments: As of April 2017, while the Loan Programs Office (LPO)had made some progress in filling key monitoring positions, several vacancies in the leadership of the Special Assets and Risk Management Divisions remained. LPO officials noted they were unlikely to fill any of these staffing vacancies given budget and program uncertainties.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    2 open recommendations
    including 1 priority recommendation
    Recommendation: To strengthen Education's oversight of the loan rehabilitation process, the Secretary of Education should direct the Office of Federal Student Aid's Chief Operating Officer to take steps to ensure that the final monitoring plan for the new defaulted loan information system contract identifies risks presented by the contractor or contract work and the oversight activities planned to address those risks.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: Education concurred with this recommendation and reported that it has developed a contract monitoring plan that tracks explicit deliverables related to key risk areas. Education also reported that the new vendor for the defaulted loan information system is using a methodology, referred to as Lifecycle Management Methodology, that includes risk monitoring and mitigation strategies, and is using an independent verification and validation service to work with the new vendor to ensure that all appropriate processes and controls are in place. With the contract's base period end date of July 31, 2016, GAO will close this recommendation when Education provides documentation of its monitoring reviews that show its contractor is receiving appropriate levels of oversight.
    Recommendation: To strengthen Education's oversight of the loan rehabilitation process, the Secretary of Education should direct the Office of Federal Student Aid's Chief Operating Officer to take steps to improve its collection agency call review process. For example, Education could take steps to ensure that quarterly rehabilitation call reviews are completed, establish procedures for monitoring collection agency corrective actions, and utilize call review results to inform its oversight of collection agencies activities.

    Agency: Department of Education
    Status: Open

    Comments: Education concurred and reported that it has taken a number of steps to strengthen its call review process. Education reported it conducted a review of rehabilitation calls with a specific focus on the Fair Debt Collection Practices Act and unfair, deceptive, or abusive acts or practices. The results of the review indicated certain collection agencies were not consistently acting in the best interest of borrowers, taxpayers, and the government. As a result five collection agency task orders were allowed to wind down in April 2015. Education also reported that as of April 2015, the Office of Federal Student Aid (FSA) increased call monitoring on rehabilitation calls from 20 a quarter per collection agency to at least 20 per month per collection agency. FSA secured a third party vendor in September 2015 to assist with its call monitoring efforts with the expectation that the vendor would be responsible for reviewing an additional 2,500 calls per month. Education also committed to conducting on-site reviews of each collection agency at least annually beginning in December 2015. GAO will close this recommendation when Education provides monthly data on call reviews conducted by FSA and its third-party vendor from April 2015 to the most recent month available and documentation of the on-site reviews of collection agencies that FSA has conducted since December 2015. Although Education provided an update for this report in FY17, it did not include an update for this particular recommendation.
    Director: Brown, Orice Williams
    Phone: (202)512-5837

    4 open recommendations
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to strengthen procedures in place to guide Reserve Banks' efforts to manage emergency program access for higher-risk borrowers by providing more specific guidance on how Reserve Bank staff should exercise discretion and document decisions to restrict or deny program access for depository institutions and primary dealers that would otherwise be eligible for emergency assistance.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document a plan for estimating and tracking losses that could occur under more adverse economic conditions within and across all emergency lending activities and for using this information to inform policy decisions, such as decisions to limit risk exposures through program design or restrictions applied to eligible borrowing institutions.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff, in drafting regulations to establish the policies and procedures governing emergency lending under section 13(3) of the Federal Reserve Act, to set forth the Federal Reserve Board's process for documenting, to the extent not otherwise required by law, its justification for each use of this authority.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document the Federal Reserve Board's guidance to Reserve Banks on types of emergency program decisions and risk events that require approval by or consultation with the Board of Governors, the Federal Open Market Committee, or other designated groups or officials at the Federal Reserve Board.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.