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BUSINESS Friday 15 February 2019
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Report finds problems with student loan servicing, oversight

By KEN SWEET follow its recommendations
NEW YORK (AP) — The nine for improving oversight.
companies and organiza- The Department of Educa-
tions tasked with servicing tion did not immediately
the accounts of the nation's have a response to the In-
30 million student loan bor- spector General's report.
rowers repeatedly failed to The federal government
do their jobs properly over does not manage stu-
a period of years and their dent loans on its own. FSA
regulator neglected to outsources student loan
hold them responsible, a accounts to a handful of
new report finds. private companies and
The report released Thurs- state-run loan authorities.
day by the Department of Navient, Great Lakes Edu-
Education's independent cational Loan Services, Nel-
inspector general's office net Servicing and the Penn-
shows some borrowers sylvania Higher Education
weren't getting the guid- Assistance Agency are the
ance and protection they largest. The companies are
needed as they sought paid a monthly fee per ac-
the best plan for paying count and are responsible
off their student loans. The for making sure borrowers
nation's student loan debt pay on time, and that the
now stands at $1.5 trillion. In this Oct. 23, 2018, file photo, students walk on the campus of Miami Dade College, in Miami. borrower is in the correct
The Inspector General's re- Associated Press repayment plan.
port focused on the opera- In its report, the inspector
tions of Federal Student Aid, The report found, in many some servicers having the did the FSA require the ser- general highlighted two
a part of the Department cases, FSA was not hold- same issue repeatedly. In- vicer to conduct a full file recurring problems in par-
of Education that oversees ing student loan servicers stead of ordering changes review," the report said. ticular: Loan servicer repre-
student loans, from January accountable when they at the servicers, FSA often "FSA also rarely penalizes sentatives failed to inform
2015 to September 2017. failed to follow the rules. For let the company off with a servicers for recurring non- borrowers of all their re-
FSA also oversees student example, the report says slap on the wrist. compliance." payment options and they
loan servicers, making sure FSA found a problem at a "In most cases ... FSA did not In its response to the in- miscalculated a borrower's
they are in compliance student loan servicer six out take actions stronger than spector general, the FSA monthly payments under
with their contracts with the of 10 times the regulator did correcting the accounts of disagreed with the report's certain types of repayment
federal government. a formal observation, with those affected (and) rarely conclusions but agreed to plans.q

US wholesale prices dip 0.1 percent in January

By MARTIN CRUTSINGER volatile food and energy, line prices and the biggest
Associated Press were up 2.6 percent over drop in diesel fuel since De-
WASHINGTON (AP) — U.S. the past 12 months. cember 2015.
wholesale prices fell for a The government reported Food costs at the whole-
second straight month in Wednesday that consumer sale level fell 1.7 percent in
January as energy costs fell prices were unchanged in January, reflecting big de-
sharply again. The monthly January and are up only clines in the price of eggs,
declines were more evi- 1.6 percent over the past vegetables and fruit.q
dence that inflation re- 12 months.
mains under control. The Federal Reserve last
The Labor Department said month held its key interest
Thursday that producer rate steady after boosting
prices, which track chang- it four times in 2018. The Fed
es before they reach the said it would be "patient" in
consumer, dipped 0.1 per- deciding to hike rates this In this Aug. 24, 2018, file photo, worker rakes wild blueberries at
cent in January, matching year, a signal that investors farm in Union, Maine. Associated Press
the 0.1 percent December saw as indicating the cen-
decline. In both months tral bank planned to re-
energy prices fell sharply, main on hold for a number
dropping 3.8 percent last of months as it assessed the
month after a decline of impact its previous hikes
4.3 percent in December. were having on the econ-
Energy prices began falling omy. The Fed has room to
in November with a 5.1 per- keep rates steady because
cent drop. inflation pressures are ab-
Over the past 12 months, sent.
wholesale prices have risen The report on wholesale
just 2 percent. That's the prices showed that the
smallest 12-month change 3.8 percent drop in en-
since July 2017. Core whole- ergy costs reflected a 7.3
sale prices, which subtract percent decline in gaso-