The new report puts a harsh light on the internal workings of the Education Department. For example, if the department suspects misconduct by a lender, it has no established procedure on how to respond, the report says. The department may send a company a letter asking it to “cease the activity” that may be questionable. But it does not monitor whether those letters work, the report found.

In addition, before October 2006, the department did not have a centralized system to track external complaints — by consumers, by colleges or even by other lenders — about possible misconduct by lenders. In more than a dozen instances from 2001 to 2006, the department may not have concluded whether specific conduct complied with regulations at all, the report found.

As if to underscore the report’s criticism, the New York attorney general, Andrew M. Cuomo, who in Congressional testimony in April described the department as “asleep at the switch,” announced yesterday that he was expanding his inquiry into the student loan industry.

Mr. Cuomo said his office had sent subpoenas and document requests to dozens of universities around the country, demanding information about arrangements with student loan companies that rewarded college athletic departments with payments for steering students to particular lenders.

The G.A.O. report recommended that the department come up with ways to detect misconduct by lenders — for example, by finding out how colleges choose which loan companies to include on their lender lists. It also recommended giving lenders guidance on what incentives are prohibited, before the new rules take effect next year. And the report called on the department to come up with a way to decide how to respond to violations of rules; by writing a letter, imposing a fine or expelling a lender from the loan program.

Congressional Democrats trumpeted the report as further evidence that the department had failed to protect students and their families.

“This report again underscores that the Department of Education completely defaulted on its responsibilities to protect the nation’s student loan programs,” Representative George Miller, the California Democrat who is chairman of the House Education and Labor Committee, said in a statement yesterday. “There is simply no excuse for this administration ignoring repeated warnings about potential lender abuses, both from independent agencies and even from lenders themselves.”