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More than 130 Members of Congress urge Secretary DeVos to reverse her decision to scrap Obama-era student loan servicing reforms
Durbin’s Student Loan Borrower Bill of Rights was basis for many of the now-repealed student protections
WASHINGTON – U.S. Senator Dick Durbin (D-IL) joined more than 130 Members of Congress calling for Secretary of Education Betsy DeVos to reverse a decision to rescind Obama-era memos on student loan servicing reforms. The reforms had included new consumer protections for borrowers and improvements to the quality of federal loan servicing.
“Your decision to rescind these memos—including the guidance making servicers’ past performance and record of compliance with the law the most important non-cost factor in the evaluation—will put millions of borrowers and taxpayers at risk,” wrote the Members of Congress. “Without accounting for past performance, federal contracts will be open to bidders that have previously violated state or federal consumer protection laws, mistreated members of our military, and consistently ignored the needs of their borrowers.”
On April 11, 2017, the U.S. Department of Education announced Secretary DeVos was rescinding three critical policy memos intended to reform the student loan servicing process meant to better assist borrowers in managing their loans, hold servicers accountable, and set financial incentives that will best support the interest of students. The memos were issued by the Obama Administration following a request from Senate Democrats for common-sense improvements to the student loan servicing process. House Democrats also requested the Department continue to improve the student loan collection and servicing processes for struggling borrowers. After DeVos’ latest action, it is unclear how the Department intends to move forward with the current contracts for student loan servicing which are worth more than $840 million per year.
“With one in four student loan borrowers in default or delinquent on their federal student loans, it is the responsibility of the Department to address the student debt crisis and ensure that all service providers in the student loan program are doing everything they can to put students and families first ahead of the profits of student loan companies,” wrote the Members.
The letter was signed by a total of 25 Senators. In addition to Senator Durbin, the letter was signed by Senators Patty Murray (D-WA), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Patrick Leahy (D-VT), Bernie Sanders (I-VT), Kamala Harris (D-CA), Dianne Feinstein (D-CA), Tammy Baldwin (D-WI), Al Franken (D-MN), Chris Murphy (D-CT), Richard Blumenthal (D-CT), Jack Reed (D-RI), Sheldon Whitehouse (D-RI), Ron Wyden (D-OR),Jeff Merkley (D-OR), Ed Markey (D-MA), Catherine Cortez Masto (D-NV), Tom Udall (D-NM), Mazie Hirono (D-HI), Bob Menendez (D-NJ), Cory Booker (D-NJ), Brian Schatz (D-HI),Tim Kaine (D-VA), and Maria Cantwell (D-WA).
The letter was signed by a total of 111 House Democrats, including Representatives Danny K. Davis (D-IL), Raja Krishnamoorthi (D-IL), Jan Schakowsky (D-IL), Daniel W. Lipinski (D-IL), Bill Foster (D-IL), Bobby L. Rush (D-IL), Robin L. Kelly (D-IL), and Cheri Bustos (D-IL).
Durbin has long advocated for increased protections for student borrowers and he has worked to build broad support in the Senate for legislative action to reduce new student loan debt and make it easier for millions of working families to manage the student loan debt they already have. In the last Congress, he introduced the Student Loan Borrower Bill of Rights (S. 840) with U.S. Senators Elizabeth Warren (D-MA) and Jack Reed (D-RI) to ensure struggling student borrowers are treated fairly by their student loan servicers and understand the full range of repayment options and resources available to them. He will soon reintroduce the bill.
Full text of the letter is available here.