AAUW Washington Update

AAUW Washington Update 

April 28, 2017


Secretary Betsy DeVos Rescinds Obama-era Student Loan Protections
On April 11, Education Secretary Betsy DeVos signed an order turning over key parts of the Obama-era plan to streamline the student lending system and to protect student borrowers. A major piece of the Obama administration’s guidance struck down by DeVos states the Department should strongly consider a company’s track record when choosing student loan vendors and should not choose companies who have demonstrated poor service or other issues in the past. Nearly two dozen state attorney generals spoke out against DeVos’ move to revoke this federal guidance to increase consumer protections in student loan servicing. In their letter, the attorneys general told Secretary DeVos that her decision “to roll back essential protections imperils millions of student loan borrowers and families.” The Obama administration cut out private banks and lenders as student debt collectors, as they profited greatly from student loans, and put the federal government in charge of lending. The Department then contracted out to private firms for the services and put strict safeguards in place to protect borrowers. Overturning the guidance allows for contracting companies our country that have historically mistreated consumers, which is troubling for the future of student loans.