Uncovered Emails Show Secretary DeVos Asks ‘How High’ When Student Loan Servicers Say ‘Jump’
See highlights below from the explosive August 15 story from Politico, ‘How the student loan industry lobbied DeVos to fight state regulations.’ Derek Martin, director of consumer watchdog group Allied Progress issued the following in response:
“These emails confirm what everyone suspected: Secretary DeVos works for the student loan servicer industry, not the other way around. It’s clear that an email from Navient’s CEO making demands for less oversight carries more weight with DeVos than tens of thousands of student borrower complaints about industry mistreatment.
“It’s bad enough that the Trump administration has dispensed with any and all serious effort to hold loan servicers accountable for bad behavior, but they are actively making the student debt crisis worse by stamping out state efforts to try and keep servicers honest.”
WHAT YOU NEED TO KNOW:
After A Lobbying Blitz By The Student Loan Industry, Betsy DeVos Granted Their Wish And The Department Of Education Took A Strong Stance On Federal Preemption.
The Student Loan Industry Lobbied The Education Department (ED) Heavily To Fend Off State Proposals “To Crack Down On Student Loan Servicing Companies” And The Education Department’s Strong Stance On Federal Preemption Came Shortly After.
The Student Loan Industry “Turned To The Education Department For Help” To Fend Off State Proposals “To Crack Down On Student Loan Servicing Companies” And, “After A Flurry Of Industry Lobbying,” Came The Education Department’s Strong Stance On Federal Preemption. “The Trump administration’s attempts to block states from regulating some student loan companies last year came after a flurry of industry lobbying, […] As a growing number of states considered new laws to crack down on student loan servicing companies, the industry turned to the Education Department for help in fending off that scrutiny.” [Michael Stratford, “Exclusive: How the student loan industry lobbied DeVos to fight state regulations,” Politico, 08/15/19]
SLSA, The Student Loan Industry Trade Group, Shared Proposals On How To Implement A Preemption Policy And Helped DeVos Aides To Track States Working On Regulating The Student Loan Industry.
Emails Show The President Of The Student Loan Servicing Alliance (SLSA) Sharing Multiple Options From Industry On How To Approach A Preemption Policy.
Emails Show Industry “Debated Whether To Ask The Trump Administration To Add Student Loan Preemption” In Emails With ED.“The emails obtained under FOIA also show that the student loan industry debated whether to ask the Trump administration to add student loan preemption to its wide-ranging regulatory agenda. Winkie Crigler, who led the Student Loan Servicing Alliance, a trade group, sent an email to an Education Department official forwarding a proposal by Navient to add preemption to the regulatory agenda. But Crigler also noted that she was skeptical about that approach. ‘I would want to talk to others but I don’t think that we want to debate preemption in neg reg,’ she said, referring to the required process by which the Education Department publicly negotiates new regulations with various interest groups.” [Michael Stratford, “Exclusive: How the student loan industry lobbied DeVos to fight state regulations,” Politico, 08/15/19]
The SLSA President Also Helped Betsy DeVos’ Aides Track State Loan Servicing Regulations Before The Department Came Out Against Them.
The Trade Group President “Was In Frequent Contact With Kathleen Smith, Another DeVos Aide, About The Progress Of The Laws In Various States” As ED Was “Closely Monitoring The Status Of State Loan Servicing Laws Before Coming Out Against Them.”“The emails also show that Education Department officials were closely monitoring the status of state loan servicing laws before coming out against them. Crigler was in frequent contact with Kathleen Smith, another DeVos aide, about the progress of the laws in various states, trading intelligence about whether state lawmakers and governors would adopt them, according to the emails.” [Michael Stratford, “Exclusive: How the student loan industry lobbied DeVos to fight state regulations,” Politico, 08/15/19]
Loan Servicers Also Individually Worked With Betsy DeVos’ ED To Implement A Federal Preemption Policy, Including Personal Lobbying From Navient’s CEO And PHEAA’s Lawyers Collaborating With The Administration On A Lawsuit Between The Company And The Commonwealth Of Massachusetts.
Navient CEO Jack Remondi “Personally Emailed” A “Top” DeVos Aide Urging ED To Implement A Federal Preemption Policy For Student Loan Companies And Months Later The Trump Administration Did Just That.
Navient CEO Jack Remondi “Personally Emailed” A “Top” DeVos Aide Urging ED To “Declare That States Lacked The Authority To Police The Companies That Collect Federal Student Loans” And “The Trump Administration Several Months Later Agreed To Remondi’s Request.” Navient CEO Jack Remondi “personally emailed a top aide to Secretary Betsy DeVos in September 2017 urging the administration to ‘quickly’ declare that states lacked the authority to police the companies that collect federal student loans. Remondi, who called the timing ‘critical, said he was concerned about the licensing fees that companies would have to pay to state regulators. […] The Trump administration several months later agreed to Remondi’s request — which had been echoed in other emails by student loan industry groups like the Student Loan Servicing Alliance and the National Council for Higher Education Resources.” [Michael Stratford, “Exclusive: How the student loan industry lobbied DeVos to fight state regulations,” Politico, 08/15/19]
PHEAA Lawyers And ED Officials Were In Contact As The Administration Was Trying To “Stop Massachusetts From Suing The Company” And Even “Appeared To Strategize Together” On At Least One Occasion.
Emails Between ED Officials And PHEAA Show They Communicated “As The Trump Administration Sought To Stop Massachusetts From Suing The Company” And “In At Least One Case The PHEAA Lawyer And The Administration Appeared To Strategize Together.”Emails “show correspondence between Education Department officials and attorneys for another loan servicer, the Pennsylvania Higher Education Assistance Authority, or PHEAA, as the Trump administration sought to stop Massachusetts from suing the company. The administration in January 2018 filed a statement of interest in state court in Massachusetts that said the state attorney general, Maura Healey, lacked the authority to sue PHEAA because it collects student loans on behalf of the federal government. PHEAA’s outside counsel, an attorney at the firm Ballard Spahr, was in contact with Education Department attorneys before and after the Trump administration made the filing. And in at least one case the PHEAA lawyer and the administration appeared to strategize together, according to the emails, some of which are redacted.” [Michael Stratford, “Exclusive: How the student loan industry lobbied DeVos to fight state regulations,” Politico, 08/15/19]
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