On Tuesday, Betsy DeVos continued her assault on education by dismantling any protections for loan borrowers. Her memorandum, "Student Loan Servicer Recomplete," effectively erases the Obama administration's 2016 reforms on federal student loans in just four paragraphs.
Prior to 2016, the student loan providers that were contracted with the Department of Education and managed by the Federal Student Aid office operated with little to no oversight. Providers were racking up thousands of complaints regarding their loan providers and managers. Grievances usually centered around fines, being able to obtain information from the lender, how payments were handled, receiving the wrong or misleading information, bad customer service and harassing phone calls. These poor lender practices were contributing to a high number of defaults as they refused to work with borrowers.
The Obama administration recognized the need for minor reforms and organization that if implemented, would help protect borrowers and in turn assist lenders in recouping their money. The rules consisted of a Student Aid Bill of Rights:
- requiring the Federal Student Aid office to continually evaluate lenders that contract with the Department of Education to make sure they are meeting borrowers' needs
- providing economic incentives for those lenders with high performance evaluations
- creating a system so that borrowers could find and understand all lender information on one website
- maintaining a quality assurance program so that borrowers could trust that lenders contracting with the Department of Education meet requirements
- requiring "timely and accurate responses" from lenders
- providing a feedback system for borrowers to report complaints, positive interactions and suspicious activity by lenders.
DeVos' memo erases all these basic, common sense rules for lenders. Even lenders contracted with the Department of Education can return to their old ways of harassing borrowers, misplacing payments, excessive fines, not answering borrowers' questions and misleading and confusing their clients. Her reasoning for this abrupt turn was simply that the new rules were not working. No evidence of why or how was given.
Before becoming the Secretary of Education, DeVos did step down from various companies and boards of educational groups that would have caused a conflict of interest. However, as of the last known report in January, she had yet to divest from investments that involved lending companies or those that managed those companies. But even if she did divest, DeVos has deep ties to these lenders. It is not improbable that her latest assault is directly, financially benefiting those close ties if not herself and her family. As a government employee, paid by taxpayer money, DeVos' first concern must always be how her actions affect the people, not how they will affect corporations or her business ties.
Republicans can never again claim to be the party of Lincoln who said, "...and that government of the people, by the people, for the people, shall not perish from this earth..." It is perishing right before our eyes because the Republicans are slaughtering it.