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Betsy DeVos' Education Dept is BLOCKING Student Loan Oversight
The Consumer Financial Protection Bureau, written about dozens of times at Smart Dissent including last week, is at it again. CFPB and the Department of Education are supposed to protect students from loan companies that break the law. But Republicans like Betsy DeVos is running the Education Department, giving student loan companies the green light to ignore regulators’ oversight.
The director of the Consumer Financial Protection Bureau says the Trump administration's Education Department is getting in the way of efforts to police the student loan industry. The revelation, in a letter obtained by NPR, comes at the same time that lawsuits allege that widespread wrongdoing by student loan companies is costing some borrowers thousands of dollars.
CFPB Director Kathy Kraninger explained the problem in an April letter responding to questions from Sen. Elizabeth Warren and other lawmakers about whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.
...Companies that manage student loans, known as student loan servicers, are refusing to share information that the CFPB says it needs to perform proper oversight. "Since December 2017," Kraninger wrote in the letter, "student loan servicers have declined to produce information requested by the Bureau for supervisory examinations" related to federal student loans.
Students deserve better than this. Our Education Department is getting in the way of efforts to police the student loan industry.
Kraninger, a Trump administration appointee, is in essence saying that the CFPB is trying to do its job protecting student borrowers and supervising loan servicing companies, but the Education Department is getting in the way..... information from student loan servicers is "necessary for supervisory examinations."
"It's actually quite remarkable," says Seth Frotman, executive director of the nonprofit Student Borrower Protection Center. "The head of the Consumer Financial Protection Bureau is telling the world that the secretary of education has put in place a series of policies that are obstructing federal law enforcement officials from standing up for the millions of Americans with student debt."
Frotman used to be the CFPB's student loan ombudsman but quit last summer over frustrations with the Trump administration. In a scathing resignation letter last August, he said the Trump administration was "turning its back on student borrowers" and preventing him from doing his job.
These student loan servicers are doing criminal things and Republicans are allowing them to get away with it. STUDENTS, OUR YOUTHS, are getting crushed by it in illegal and unfair ways that will harm them potentially forever.
....regulators and advocacy groups are filing a growing number of lawsuits against loan servicing companies alleging mishandling of the loan forgiveness program.... allegations that servicing companies gave borrowers bad information or advice that resulted in them thinking they were getting credit toward loan forgiveness, when in fact they were in the wrong loan or payment plan.... about 99% of borrowers who thought they had reached that 10-year milestone and applied for forgiveness were rejected. More than 1 million people are actively pursuing loan forgiveness under the program and hoping to qualify.