Betsy DeVos undoes Obama student loan protections
On Tuesday, Education Secretary Betsy DeVos pulled back protections that the Obama administration had put forward in order to help students who took out federal student loans.
Toward the end of his tenure as president, Barack Obama required that the Federal Student Aid office do more to help the recipients of student loans manage their debt or even get their debt forgiven. However, those memos have been formally withdrawn by DeVos, who said that they fell short of their aims and that they were inconsistent, though there was no further explanation given as to what those inconsistencies and shortcomings were.
“We must create a student loan servicing environment that provides the highest quality customer service and increases accountability and transparency for all borrowers, while also limiting the cost to taxpayers,” DeVos said.
However, DeVos’s move “will certainly increase the likelihood of default,” said David Bergeron, a senior fellow at the Center for American Progress, according to Bloomberg.
Illinois Attorney General Lisa Madigan agreed with Bergeron’s sentiment, noting: “The Department of Education has decided it does not need to protect student loan borrowers.”
Former Deputy Treasury Secretary Sarah Bloom Raskin also noted that the new policy would put loan collectors ahead of students in the eyes of the government.