21 State AGs Denounce DeVos for Ending Student Loan Reform
April 28, 2017
As published by The Hill on April 24, 2017.
More than 20 Democratic state attorneys general denounced Education Secretary Betsy DeVos in a letter Monday over her decision to end the department’s efforts to reform the student loan industry, according to a Reuters report.
Her decision would halt the department’s efforts to help borrowers know about their debt and repayment options.
“We should be looking for ways to ease the burden of student debt, not enabling the student loan servicing industry to manipulate and exploit students,” New York Attorney General Eric Schneiderman wrote, according to Reuters.
DeVos, a controversial President Trump nominee, announced in an April memo that she was ending the reform efforts because of “moving deadlines, changing requirements and a lack of consistent objectives.” DeVos’s decision echoes the Republican policy view that the federal government should not be involved in the student loan business.
Former President Obama moved the student lending business from banks and companies to the federal government and worked to set up safeguards to ensure lenders followed the law.
In the $1.3 trillion business, $137 billion of student loan debt is in default, according to a March report by the Consumer Federation of America.
“We now find ourselves in a situation where we must promptly address not only these shortcomings but also any other issues that may impede our ability to ensure borrowers do not experience deficiencies in service,” DeVos wrote in a version of her memo published on the department’s website.
The department did not immediately respond to Reuter’s request for comment about the letter.
Democratic National Committee Chairman Tom Perez slammed DeVos’s decision, saying it would help big corporations profit on student debt and counteract reforms put in place by the Obama administration.
In Obama’s final hours as president, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient Corp., a major loan servicer, alleging that it deceived borrowers about their repayment options — allegations that Navient say are false.
Navient claimed the bureau, created under the Obama administration, only sued because it refused to settle in a CFPB investigation before Trump took office.