The U.S. Department of Education has not properly overseen the collection agencies it hired to pursue delinquent federal student loans, according to an audit released by the department's inspector general.

The report found that the Education Department did not make sure the 22 companies under contract were collecting debt in line with federal law and contract terms. The department also had not effectively monitored borrowers’ complaints or ensured that corrective actions were taken and failed to penalize companies for ongoing bad behavior.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.