Student Loan Servicers Flood D.C. with Cash – DeVos Hobbles Borrower Protections Rather Than Holding Servicers Accountable
Read the Report, ‘The DeVos Debt Disaster’
WASHINGTON, D.C. — Ahead of today’s House Financial Services Committee hearing concerning the $1.5 trillion student loan debt crisis, consumer advocacy group Allied Progress released a new report showing how the Department of Education, under Secretary Betsy Devos, protected student loan servicers by systematically eroding protections for borrowers following millions of dollars in campaign contributions and lobbying by the servicer industry.
The Education Department has the important responsibility of making sure student loan servicers do right by borrowers, guiding them through the repayment process and making sure they make the best decisions for their respective circumstances. But under DeVos, the Department of Education has allowed every loan servicer to violate federal rules and has rarely punished them for their abuses. Servicers have poured more than $10 million into lobbying and campaign contributions – an investment that has paid off handsomely as DeVos abandons borrowers.
“Student loan servicers have showered Washington with millions of dollars in lobbying and campaign contributions – an investment that continues to pay off,” said Derek Martin, director of Allied Progress. “Rather than holding servicers who break the rules and hurt student loan borrowers accountable, the Education Department under Betsy DeVos has empowered servicers to abuse consumers and filled its ranks with former industry executives. The fox isn’t guarding the henhouse here… it owns the henhouse.”
KEY FINDINGS :
Student loan servicers have spent more than $7.5 million on lobbying since Trump and DeVos took office. The industry has poured $3.9 million into campaign contributions since 2012. Here’s how those investments have paid off under DeVos:
- DeVos is obstructing Obama-era borrower defense rules through an “unlawful” delay and proposing weaker protections that would deny $13 billion to students who were victimized by sham schools.
- DeVos’ Education Department, staffed with former servicer industry executives, repealed the Obama-era gainful employment rule to prevent federal loan aid from being wasted on schools that chronically disregard students’ job prospects, costing taxpayers over $6 billion.
- Additionally, DeVos is working alongside servicers to combat state-level borrower protections, even appearing to “strategize together” in one lawsuit.
- DeVos is thwarting another Trump Administration agency’s efforts to oversee servicers, prompting its Director to say DeVos is “getting in the way of efforts to police the student loan industry.”
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