This technical glitch with the new Department of Education student loan website is one of those things that makes for good copy (and great cheap shots) but is ultimately insignificant.
But, it does hint at the vulnerability of the shift to direct loans: If the Department doesn’t have the capacity to administer it the politics around all this will change. We ended up with the racket that President Obama just fixed because the federal government was doing such a poor job administering student loans. A dirty secret of the reforms, however, is that many of the private loan entities will continue to service all these loans, just under different terms. But it will be the Department overseeing all this much more — and being accountable for it.
So if the Department doesn’t have the full time staff and expertise to really oversee this it could open the door to revisit loans yet again. And that capacity comes from parts of the federal budget that don’t get a lot of attention and where there is room for a lot of political mischief. This year’s budget requests more support for this function, so keep an eye on all that. For appropriators on the Hill items that send money to states and districts are more interesting than items that send money to departmental management…and for people who want to discredit this reform this is where they’re going to focus their attention, not on some malfunctioning website.