Augusta Free Press

Herring demands Education Secretary DeVos stop rolling back protections for student borrowers

Today Attorney General Mark R. Herring and a coalition of state attorneys general sent a letter to U.S. Department of Education Secretary Betsy DeVos, demanding that the Department of Education stop its systematic rolling back of critical protections for student loan borrowers.

At issue is the Department of Education decision to terminate two key memoranda of understanding it had with the Consumer Financial Protection Bureau (CFPB) on critical protections designed to streamline the supervision of student loan servicers.

“There are more than 1 million student borrowers in Virginia who have a total of more than $30 billion in outstanding student loan balances, and we should be doing everything we can to ensure they are protected from deceptive practices by federal loan servicers and for-profit schools,” said Attorney General Herring. “Students and their families should be able to rely on the Department of Education to be looking out for their best interests, but Secretary DeVos and her department are helping borrowers and lenders take advantage of Virginians. I promise not to stand idly by as these critical protections are rolled back, and I’ll continue to stand up and fight for Virginia students and their families.”

The letter to Secretary DeVos, written by a coalition of 19 state attorneys general, finds three main faults with a letter sent in August by the Department of Education to the CFPB, in which the Department terminated two key memoranda of understanding it had with the CFPB.

As the attorneys general’s letter details: “Contrary to the Department’s assertion, Congress did not exempt the $1.3 trillion federal student loan market from the Consumer Financial Protection Bureau’s jurisdiction – or from the jurisdiction of any other law enforcement agencies. … Not only is the Department’s assertion demonstrably false, but such an exemption would make no sense – the market for federal student loan servicers is bigger than any other consumer finance market except mortgages. Moreover, student loan borrowers, who in most cases cannot discharge their student loans through bankruptcy, are among the most vulnerable borrowers.”

The attorneys general’s letter highlights the strong work the CFPB has done to protect students and families – often in partnership with the Department of Education and state attorneys general. The letter details the many student loan accomplishments of the CFPB:

Working with state Attorneys General to create an online tool that helps students plan for college by comparing financial aid offers, loan commitments and earnings potential.

Joining Attorney General Herring in signing today’s letter were attorneys general from California, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington, as well as the executive director of the Hawaii Office of Consumer Protection.