Herring condemns DOE rollback of student loan servicing reforms
Attorney General Mark R. Herring has joined 21 other state attorneys general in calling out the U.S. Department of Education for abdicating its responsibility to millions of student loan borrowers and their families across the country by revoking critical reforms designed to help students avoid default and curtail loan servicer misconduct.
The multistate letter was sent today to Education Secretary Betsy DeVos in opposition to the Department’s recent rollback of guidance intended to protect student loan borrowers and reform the student loan servicing industry.
“Too many students across the country graduate college saddled with thousands of dollars in student loan debt and fall victim to gross misconduct by loan servicers. These critical reforms had been put in place to protect our students and their families, and it’s downright irresponsible for the Department of Education to roll them back,” said Attorney General Mark Herring. “I am proud to join my fellow attorneys general in standing up for our students, and hope the Department of Education will reconsider its reckless actions.”
The guidance, issued by the Department of Education last year, centered on helping borrowers get accurate information about their loans and repayment options, which ensured the consistency of service provided by student loan servicers, increased servicer accountability, and enhanced transparency. Critically, these reforms aimed to improve borrowers’ access to affordable loan repayment plans that are designed to help borrowers in distress avoid default. But the Department’s action earlier this month has instead left student loan borrowers vulnerable to poor practices and abuses that the servicing reforms were intended to prevent.
According to the letter, borrowers struggle under the weight of their student loan debt and federal student loan default rates are on the rise. In 2015, the CFPB estimated that more than 25 percent of student loan borrowers were delinquent or in default on a student loan.
During his term, Attorney General Herring has secured $2.3 million in loan forgiveness for former students of Education Management Corporation and partnered with the U.S. Department of Education to help more than 5,000 qualified Corinthian Colleges students in Virginia receive notice about debt forgiveness after their schools closed.
Joining Herring in sending the letter are attorneys general from Massachusetts, Illinois, California, Connecticut, Hawaii, Iowa, Kentucky, Maine, Maryland, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia, as well as the Executive Director of the Office of Consumer Protection of Hawaii.