After DeVos Halted Student Loan Protections, States Stepped Up. Now She's Stopping States From Helping Students.

The headline pretty much tells the story here but please allow us to elaborate a bit.

After the education secretary, Betsy DeVos, started scaling back consumer protections for student borrowers last year, six states and the District of Columbia sped up their own efforts to crack down on abusive lending practices by companies that administer federal loan programs.

Citing the traditional role of states in protecting consumer rights, officials in Connecticut, Illinois, California, Washington, Pennsylvania, Massachusetts and the District of Columbia — have responded by imposing new licensing regulations on the debt-servicing companies and passing a student bill of rights.

Now Ms. DeVos is trying to stop them.

In Washington DC the politicans instituted new regulations to protect student borrowers by requiring student loan servicers to be licensed by the city.  Such licensing would require the firms to not engage in fraudulent or irresponsible practices.  Pretty straight forward example of regulations that protect us, specifically our young people seeking to education and better themselves.

Administration lawyers accused the District of Columbia of trying “to second-guess” department officials in the selection of loan servicers, violating the supremacy clause in the Constitution....

Soon after the move, after months of battling the administration’s deregulation agenda, the federal government’s top student consumer protection officer, Seth Frotman, resigned from his job at the Consumer Financial Protection Bureau.

We wrote about Mr. Frotman's resignation last week; so disgusted he could no longer work to help students as every effort was undermined in favor of corporations.  “As state law enforcement officials and legislators across the political spectrum stand up for student loan borrowers who have been ripped off at every turn, Donald Trump and Betsy Devos have instead chosen to protect companies engaged in rampant illegal practices,” he added. “At stake is the financial future of millions of Americans and a trillion dollar black hole in our financial markets.”

Under Ms. DeVos, the department has loosened regulations on for-profit colleges that account for many student defaults and fraud allegations and killed a plan to introduce sweeping protections for borrowers released at the end of the Obama administration. In July, she proposed an overhaul of the department’s student loan oversight division that would cut an Obama-era debt relief program by $13 billion for students who claim to be cheated by disreputable schools.

The failure to hold companies accountable, Mr. Frotman and his allies say, has far-reaching consequences. The debt owed by 44 million students now exceeds $1.5 trillion — larger than national auto or credit card debt. One million borrowers already default every year, and 40 percent of students are expected to default on their loans by 2023, according to a January study by Brookings.

Sources: 

https://www.nytimes.com/2018/09/06/us/politics/devos-student-loans.html

http://smartdissent.com/article/top-student-loan-official-resigns-after-trump-gop-turn-back