Oversight of federal student loans is lacking, watchdog says

The Education Department's independent watchdog says the agency hasn't done enough to stop student loan servicers from breaking federal rules.

An audit released Thursday by the department's inspector general finds that officials who oversee student loans haven't properly tracked problems and rarely penalize servicers.

The office that manages student loans says it disagrees with the finding but is implementing the audit's recommendations.

The department hires outside companies to handle billing for more than $1 trillion in student loans and to help struggling borrowers explore payment options.