A recently released audit of the U.S. Department of Education found that its student loan unit failed to adequately supervise the companies it pays to manage the nation's trillion-dollar portfolio of federal student loans.

Fiona Morgan will be graduating from SUNY Old Westbury with a degree in fine art, but it won't be the only thing with which she graduates.

"I am going to have a lot of debt," she says.

The inspector general's report says it found that loan-servicing companies failed to follow rules, which could cause “increased interest or repayment costs incurred by borrowers, the missed opportunity for more borrowers to take advantage of certain repayment programs, negative effects on borrowers' credit ratings, and an increased likelihood of delinquency or even default.”

The report is also critical of the Education Department's office of Federal Student Aid, saying it rarely penalizes loan companies that failed to follow the rules.