U.S. Education Secretary Betsy Devos rolled back two mandates set forth by the Obama administration aimed at protecting Americans with student loan debt. Devos said rolling back the mandates from the previous administration was an effort to increase accountability and ease the burden on taxpayers.
The Federal Student Aid Office does not service student loan contracts in-house. Instead, student loan contracts are handled by third-party companies. As a condition of their contract awards, the Obama administration set mandates in place that favored companies that sought to aid debtors with more viable repayment options, keeping students out of default. The emphasis was on customer service, transparency and a wider menu of repayment options, loan forgiveness, and rehabilitation.
A spokesperson from the Consumer Financial Protection Bureau released the following statement:
“Borrowers deserve to be treated fairly and should be able to repay their debt without having to deal with illegal loan servicing practices. The CFPB will continue to find ways, working with all of our partners, to support and protect the 44 million Americans with student debt.”
The sentiment that those whom the government helps are burdensome to taxpayers is all the more troubling in this instance. If Secretary Devos truly wanted to ease the burden on taxpayers, she would direct her department to ensure that access to higher education is more affordable while ensuring those with student debts had more options to keep their accounts in good status. Some say the Obama administration’s efforts to reduce the strain of repaying student loans did not go far enough.
This inherently left the door open for Devos to carry the ball a little further, so to speak. Instead, rescinding these memos creates opportunity for creditors to profit from student loan debt. Further, it costs taxpayers more when borrowers default on their loans. Minimizing those costs is tied to ensuring borrowers have access to options and services to settle their debts.
Attorney Adam Minsky and student loan expert Heather Jarvis offer the following advice to those with student loan debt:
- Do homework to find out what plans you are eligible for; don’t rely on your servicer to provide you with the correct information
- Don’t take advice from your debt collector
- Keep meticulous records of your loan
- Ask to speak with a member of your servicer’s management, rather than the customer service representative who answers your call
- If you have a dispute, try to send it to your servicer in writing
- Contact the student loan ombudsmen group at the Department of Education — it’s their job to resolve conflict between borrowers and servicers
- Contact your local representative and make them aware of existing problems with your servicers
Secretary Devos is neglecting her key role as the head of the US Department of Education by rolling back these Obama memos- ensuring that everyone has access to quality education and removing barriers that stand in the way. Absent these overdue protections, loan services have one less barrier than students. If we are to make America Great Again, we ought to ensure that those who believe and know that education is the key to advancement have no obstacles to overcome; our leaders should be focused on holding businesses accountable to the public not protecting profits.