The Department of Education runs a loan servicing system that doesn't work. Technical glitches prevent borrowers from accessing repayment plans. Customer service representatives give out wrong information. July 1 brings major changes. Nobody can figure out what those changes are because the website is down.
This represents a shocking development in the world of government IT infrastructure, which has historically been known for its cutting-edge reliability and user-friendly design. Remember when Healthcare.gov launched and it worked perfectly on day one? Exactly like that, but the opposite.
Advocates report borrowers can't get correct information. The people paid to provide correct information are providing incorrect information instead. Economists call this a market inefficiency. Normal people call it Tuesday.
The technical glitches arrive at the worst possible time, right before a major deadline that will affect millions of borrowers. The government had years to prepare for this. They chose not to. Bold strategy.
Borrowers attempting to navigate the system face a choice: trust the broken website, trust the misinformed customer service rep, or simply guess what they owe and mail a check to an address they found on Reddit. All three options carry identical success rates.
The organizations working with student borrowers have raised these concerns publicly. The Department of Education has acknowledged the issues exist. They promise to fix them. The fixes will arrive sometime between soon and never, weighted heavily toward never.
July 1 approaches regardless of whether the systems work. Deadlines don't care about your technical difficulties. Neither does the government that created both the deadline and the technical difficulties. Some borrowers will miss payments because they couldn't access a website. Their credit scores will drop. The computers will work fine for that part.
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