Attorney General Janet Mills demands U.S. Department of Education Secretary Betsy DeVos stop rolling back critical protections for student borrowers

September 26, 2017


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Attorney General Janet Mills demands U.S. Department of Education Secretary Betsy DeVos stop rolling back critical protections for student borrowers

Mills and 20 Attorneys General across the U.S. join together to protect student borrowers in letter to Education Secretary DeVos

AUGUSTA ? Attorney General Janet Mills today joined other Attorneys General in demanding that the U.S. Department of Education stop rolling back critical protections for student borrowers.

?Maine families facing college loan debt need the federal Department of Education to join us in protecting students from deceptive practices by for-profit schools and federal loan servicers,? said Attorney General Mills. ?Instead, Secretary DeVos is working to protect the profits of institutional lenders, to the detriment of Maine students and families.?

In a letter to Secretary DeVos, Attorney General Mills and 20 other Attorneys General criticized the Department of Education for sending a letter to the Consumer Financial Protection Bureau (CFPB) in August in which the Department terminated two key agreements with CFPB. The Attorneys General stated that in the DOE letter:

? The Department of Education falsely asserted it has exclusive jurisdiction over companies that service federal student loans when in fact student loan servicers are under the jurisdiction of the CFPB, Federal Trade Commission, Department of Justice, Attorneys General and other law enforcement agencies.

? The letter is the latest in a series of actions by the Department of Education to strip critical protections for millions of students and families repaying student loans.

? The Department of Education misrepresents the strong work done by the Consumer Financial Protection Bureau on behalf of students and families across the country.

The Attorneys Generals wrote: ?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 Department of Education?s August 31, 2017 letter terminated two memoranda of understanding with the Consumer Financial Protection Bureau with its critical protections designed to streamline the supervision of student loan services. The Attorneys Generals? letter makes clear this step harms American families and makes it more difficult for the Consumer Financial Protection Bureau to assist and protect student borrowers.

?Attorneys General work with the Consumer Financial Protection Bureau to prevent schools from selling worthless educational programs to obtain federally guaranteed student loans,? said Attorney General Mills. ?Secretary DeVos is putting all taxpayers at risk with this rollback of student loan protections. Secretary DeVos is padding the profits of loan servicers, for-profit colleges, their executives and their investors, at the expense of Maine students and their families.?

The Attorneys Generals? letter highlights the strong work the Consumer Financial Protection Bureau 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 Consumer Financial Protection Bureau:

? Processing complaints from more than 40,000 student loan borrowers from all 50 states; ? Suing Navient, the nation?s largest student loan servicer, for steering borrowers into costly repayment plans that benefit the servicer, not the borrower; ? Cracking down on abusive for-profit colleges ITT Tech and Corinthian; ? Halting illegal loan servicing practices at Wells Fargo; and ? 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 Mills in today?s letter were Attorneys General from California, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, as well as the executive director of the Hawaii Office of Consumer Protection.


Supporting documents

AG letter to DeVos