Department of Education Implements 'Secret Shoppers' to Monitor Student Loan Servicers

In an effort to increase accountability, the initiative includes increased monitoring of customer service interactions and potential penalties for servicers failing to meet obligations, as millions of borrowers resume payments after COVID-era moratorium.

• The Department of Education has announced a new initiative to increase accountability among student loan servicers, which includes the use of 'secret shoppers' to monitor the quality of service provided to borrowers.
• The 'secret shoppers' will be Federal Student Aid employees who will pose as borrowers to detect any errors or issues in the loan repayment process.
• The initiative also includes increased monitoring of customer service interactions, such as listening in on calls and tracking record keeping, to ensure that borrowers are receiving the correct information and assistance.
• If loan servicers fail to meet their obligations, the Department of Education can take actions such as withholding payments, forcing corrective action, or stopping the servicer from being allocated new borrowers.
• This initiative comes as millions of borrowers are resuming loan payments following the end of the COVID-era federal student loan moratorium, and as the Department of Education transitions to a modernized servicing platform in 2024.

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