Federal Student Loans: Department of Education Reverses Trump-Era Policy Limiting State Oversight of Student Loan Service Companies and Debt Collectors
The new direction is a reversal of the government’s approach to regulating student loan companies, after the Education Department under then-Secretary Betsy DeVos argued that the federal government should monitor the system. since the loans are federal assets and fought to reduce the participation of states in surveillance.
The FSA’s new approach, Cordray said, will be to review data requests from state and local agencies and financial regulators “promptly and approve them whenever possible.”
“It is time for us to be a partner, not a roadblock,” he added.
The top Republican on the House Education and Labor Committee argued that Cordray’s new guidelines “bend to the whims of state-based Democratic politicians who are more interested in bankrupting companies than to help student borrowers in difficulty â€.
“Congress charges the FSA with the duty of managing the federal student loan program for a reason. Federal programs need federal leadership. Yet COO Cordray’s primary goal is to shift its responsibilities onto others,” he said. said GOP Representative Virginia Foxx of North Carolina. A declaration.
The Biden administration, however, still faces pressure from some Congressional Democrats to write off $ 50,000 in federal student loan debt per borrower. Advocacy groups are also calling for a complete overhaul of the current borrower advocacy process.
