Advertisement

Education Department withdraws student loan protections

By Ed Adamczyk
Education Department withdraws student loan protections
Education Secretary Betsy DeVos rolled back protections for student loan borrowers enacted at he end of the Obama administration in a letter to Federal Student Aid chief James W. Runcie. Pool photo by Olivier Douliery/UPI | License Photo

April 12 (UPI) -- Education Secretary Betsy DeVos has rolled back protections for student loan borrowers that were enacted by the Obama administration.

She formally withdrew policies outlined in memos issued by former President Barack Obama at the end of his term in office that called for the Federal Student Aid office to strengthen protections for borrowers. The retraction of the policies came in a letter on Tuesday to James W. Runcie, the Education Department's FSA chief.

Advertisement

"This process [following the Obama memos] has been subjected to a myriad of moving deadlines, changing requirements and a lack of consistent objectives. 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. This must be done with precision, timeliness and transparency," DeVos' letter.

Among the Obama memorandums DeVos withdrew were two requiring the FSA office do more to help borrowers manage or even discharge their students loans.

The Obama protections came after an increase in student loan defaults and what some officials called systematic mistreatment of borrowers by companies servicing student loans. Among three companies bidding on upcoming student loan contracts is Navient Corp. which was sued in January by Illinois and Washington state attorneys general and the Consumer Financial Protection Bureau over allegations Navient abused borrowers by taking shortcuts to improve its own profit figures. The withdrawal of the Obama policies means Navient is a front-runner to win that contract, Bloomberg reported.

Advertisement

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement