PROVIDENCE – R.I. Attorney General Peter F. Kilmartin is urging U.S. Secretary of Education Betsy DeVos to stop rolling back protections for student borrowers.
The actions, he said, could harm taxpayers and tens of millions of families struggling to pay back student loans.
“A significant crisis is looming in the student loan industry,” he said in a statement. “Our economy cannot afford a meltdown of the student loan industry, and our young people deserve a fair opportunity to repay their debt without the service providers deploying dishonest business practices that lead to further debt.”
Kilmartin detailed his concerns in a letter sent to DeVos signed by 18 other attorneys general. The document cites a letter sent from DeVos to the U.S. Consumer Financial Protection Bureau in August that terminated two memoranda of understanding with the federal agency.
The attorneys general said the terminations allowed the U.S. Department of Education to falsely assert “it has exclusive jurisdiction over companies that service federal student loans.” The letter argues student-loan servicers are under the jurisdiction of the CFPB, U.S. Federal Trade Commission, U.S. Department of Justice, the attorneys general and other law enforcement agencies, and changing that would tip the scales in favor of student-loan providers.
“The recent actions by Secretary DeVos clearly indicate she is taking the side of the loan student services over the side of the student,” Kilmartin said. “If she won’t hold them accountable and ensure they play fair, then we will.”
The letter also accuses the Department of Education of having taken a series of actions to strip critical protections for students and families.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
