Two years into his presidency, Barack Obama’s administration completely overhauled the student loan program. Catalyzed by the skyrocketing rates of loan defaults (upwards of 8.7 million borrowers in 2010) amidst the worst recession in American history, the Obama-era legislation made it difficult if not impossible for commercial banks to benefit off the backs of affected students, forcing them to drop out of the game altogether.
Three years later, after winning his second term in office, the then-President signed further legislation that drastically reduced the interest rates on student loans. Based off this pro-economy momentum, the Department of Education later released guidelines that sought to improve customer service and enhance protections for student loan holders; strengthening federal oversight of government contractors that handle billing and collections.
“For some student loan borrowers, high-quality servicing can be the difference between getting by and going broke,” Richard Cordray, director of the Consumer Financial Protection Bureau, said. “But for too many consumers, this level of service has proved elusive.”
But this week, as promised by the Trump Administration, Secretary of Education Betsy DeVos withdrew the consumer protection guidelines under the misleading guise that they “impede our ability to ensure borrowers do not experience deficiencies in service.”
How’s that now, Betsy?
Seeing as how the guidelines very simply laid a foundation for customer service (like responding to customer inquiries and providing information on repayment plans to which borrowers have every legal right to use) it’s hard to justify – much less believe – DeVos’ statement.
Higher education affordability remains a highly contentious subject between Republicans and Democrats and was an oft-discussed topic throughout the 2016 Election. Unfortunately for American students and the future of the national economy, the wrong candidate won.Click here for reuse options!
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