Tell your representatives to demand DeVos let the Consumer Financial Protection Bureau (CFPB) police student loan fraud and protect student borrowers. Like all consumers, students are exposed to fraudulent and predatory practices in the loan industry. Between 2011 and 2013, the Department of Education and CFPB shared data on “servicers” who collect payments on federal student loans and ultimately hold collectors accountable. In early September, Education Secretary Betsy DeVos cancelled that agreement with the CFPB, signaling open season for collectors. The department continues to roll back protections for student borrowers; we need more checks and balances in place, not less.
If left unchecked, the for-profit collection industry will continue to cut corners and rip off students and taxpayers (like all for-profit industries). Just two weeks after this announcement, National Collegiate Student Loan Trusts—which holds $12B in student loans–was forced to pay $19M in penalties and refunds and halt all collection operations. Transworld Systems, their hired guns, will also pay $2.5M. They sued consumers for repayment of loans they couldn’t prove they owed and filed false reports in court. The CFPB is currently suing Navient for ripping students off. This is the exact purpose of the CFPB—to protect student borrowers from greed and abuse.