Ditching Watchdog, Betsy DeVos Signals ‘Open Season to Defraud’ Student Borrowers

(COMMON DREAMS) Julia Conley, September 6, 2017 — Calling the move “outrageous and deeply troubling,” consumer advocates and opponents of skyrocketing student debt spoke out Tuesday against the Trump administration’s decision to end the working relationship between the Department of Education and the government watchdog tasked with helping oversee the federal student loan program and protect borrowers.

At the direction of Congress, under the Dodd-Frank financial reform act, the Department of Education has shared information with the Consumer Financial Protection Bureau (CFPB) since 2011 in order to provide assistance to borrowers with complaints about Federal student loans. But the Department, now run by Secretary Betsy DeVos, informed the Bureau in a letter last week that it was ending the relationship.

Especially at a time when federal student loan debt has reached over $1.3 trillion, critics condemned the decision.

The National Consumer Law Center (NCLC) says, “the CFPB has stood up for students and demonstrated the urgent need for an independent watch dog over student loan servicers and collectors,” fighting “to ensure that struggling borrowers can access the repayment programs they are entitled to.”

The Education Department accused the CFPB of “overreaching” by “unilaterally expanding its oversight role to include the Department’s contracted federal loan servicers.” Republican lawmakers have opposed the CFPB’s involvement in monitoring student loan complaints, and the Trump administration has sought to weaken the Bureau.

Source: Ditching Watchdog, Betsy DeVos Signals ‘Open Season to Defraud’ Student Borrowers | Common Dreams