May 20, 2013
Education Dept. May Have Overpaid Loan-Collection Agencies, Report Says
At a time when the amount of defaulted federal student loans continues to climb, the Education Department has been forced to pay private debt-collection agencies based on self-reported estimates of their commissions and bonuses, not precise data, due to glitches in an online debt-management system it launched more than a year ago.
In the 2012 fiscal year, the department's Federal Student Aid office paid estimated commissions and bonuses to 23 companies that handle collections under