“The implications of this kind of website malfunction are severe, particularly when it affects millions of borrows nationwide,” Foxx said.

In a statement released after the hearing, Justin Hamilton, an Education Department spokesman, said the problem occurred on Oct. 12 and the department has no reason to believe students’ information was misused or accessed by anyone with “malicious intent.”

Congress changed the way student loans are issued last year as part of the law overhauling the nation’s health care system. It essentially stripped banks of their role as middlemen in issuing the loans. All loans are now directly issued by the government. The expectation at the time was that the measure would result in $61 billion in savings over a decade. The billions saved are to pay for Pell Grants, provide resources to community and historically black colleges, help reduce the deficit and offset expenses from the health care legislation.

Runcie said the department uses rigorous security standards but is looking to soon roll out an additional safeguard. He also said the department appreciates suggestions on ways to make its website more user friendly, and plans to make changes.

Overall, Runcie said the transition to the direct loan program has been a success.


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