Writing for the Fiscal Times, David Dayen suggests that the USPS might have a role to play in resolving the student loan default crisis:
Last week, the Education Department renewed its contracts with private student loan servicers, claiming they will rework incentives to reward good borrower outcomes. But the best practice here is staring Education officials in the face. If they’re concerned about up-front servicing costs — a weak argument considering they already spend $1 billion a year on servicers — they could always farm it out to the U.S. Postal Service, which already has the employees and physical space to do the job. This could line up with a potential post office foray into offering financial services, as outlined in a recent USPS Inspector General report. The ubiquity of post office branches, particularly on college campuses, would allow for face-to-face counseling and consultation. Not-for-profit postal loan servicers would not have incentives to push customers into default. And the whole enterprise would fulfill the Postal Service’s mission to promote commerce and economic growth.