Friday, August 16, 2019

How the student loan industry lobbied DeVos to fight state regulations - POLITICO

How the student loan industry lobbied DeVos to fight state regulations - POLITICO

How the student loan industry lobbied DeVos to fight state regulations

The Trump administration’s attempts to shield some student loan companies from new state regulations began after the industry waged a furious lobbying campaign, which included the head of student loan giant Navient, emails obtained by POLITICO show.

Jack Remondi, chief executive officer of Navient, personally emailed a top aide to Education Secretary Betsy DeVos, urging the administration to “quickly” declare that states lacked the authority to police the companies that, like his, collect federal student loans

Remondi and other industry heavyweights were trying to enlist the Education Department’s help to fend off the growing trend of states considering or passing laws to crack down on student loan servicing companies. The states were responding to allegations of misrepresentations and other abuses in the industry, which manages the student loan payments of the nation’s more than 45 million student loan debtors.

Remondi, who called the timing “critical,” told the top DeVos adviser that he was especially concerned about the licensing fees that companies would potentially have to pay to state regulators.

“Today’s federal student loan program is already overly complex, adding state based rules would not be helpful to borrowers or the cost of the program,” Remondi wrote in the September 2017 email to Jim Manning, who was acting undersecretary of the department.

Several months later, the Trump administration agreed to Remondi’s request — which had been echoed in other emails sent to the Education Department by industry groups like the Student Loan Servicing Alliance and the National Council for Higher Education Resources.

DeVos in March 2018 issued a notice declaring that federal law preempts state regulation of companies collecting federal student loans. The move drew criticism from state attorneys general, state banking regulators and the National Governors Association. Consumer advocates argued that states have the right to oversee companies operating within their borders that collect loan payments from their residents. CONTINUE READING: How the student loan industry lobbied DeVos to fight state regulations - POLITICO

No comments:

Post a Comment