Making America Great Again: Dismantling Student Loan Protections

Prior to 2016, student loan providers who contracted with the Department of Education (DEA) were allowed to operate with hardly any oversight. This led to providers racking up thousands of complaints about their loan managers. Lousy lender practices were a primary contributor to a large number of student loan defaults as the providers refused to work with borrowers. (The Liberal Yell)

The Obama administration realized the need for reforms that would help protect borrowers and assist lenders in regaining their money. The new Obama era rules led to a Student Aid Bill of Rights, which stated in part:

• Required Student Aid office to continually evaluate lenders contracting with DEA to assure they were meeting borrowers’ needs
• Providing economic incentives for lenders with high performance evaluations
• Creation of system borrowers could use to understand all lender information on one website
• Maintaining 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

Since these student loans are guaranteed by U.S. taxpayers, it seems appropriate that a borrowers Bill of Rights was instituted by the government or at least that’s what any reasonable person would conclude.

However, because of the appointment of Betsy DeVos, a right-wing, anti-public education hater as U.S. Secretary of Education by Donald “Trumporleone” Trump, these well-reasoned protections for borrowers has been gutted.

In a recent (mid-April 2017) Betsy decided to further her agenda in destroying any protections for student loan borrower protections. Betsy released a memorandum laughingly entitled: “Student Loan Servicer Recomplete” that basically erases all the Obama era student loan reforms.

Betsy the Public-School Hater’s conduct will now allow lenders to again harass borrowers, misplace their payments, charge excessive fines, and refuse to answer borrowers’ questions with misleading (false) and confusing responses.

As one would suspect, Betsy’s absurd reasoning for doing away with protecting borrowers was to state that the Obama rules weren’t working. However, the bigoted and moronic billionaire did not provide any evidence of why the rules were not working.

And lastly, undergraduate students are charged 3.76% and graduate students 5.31% interest on student loans. What is truly galling is that the lenders borrow money from the Federal Reserve (that’d be us) at 0.83% interest and then pocket almost 3.0% and 4.5% from borrowers. It is impossible for lenders to lose any money since the loans are guaranteed by the U.S. Government (that’d be you again). Isn’t America a great country?