MEMO: Student loan borrowers are taxpayers, too

IMHO Betsy DeVos's intentions for withdrawing these protections are suspicious, to say the least.

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O P I N I O N


Gates to my alma mater, DePauw University.

In early April, our fresh and barely-experienced Secretary of Education, Betsy DeVos, rolled back protections for student loan borrowers by withdrawing a series of memos that were put in place under the Obama Administration. The memos to the Federal Student Aid office were intended to help borrowers get rid of their student debt, eventually.

According to Ryan Kilpatrick at Fortune, “Then-President Obama issued the guidance after a wave of student loan defaults and allegations that lenders were providing false information, charging unexpected fees and cheating borrowers out of repayment rights.” In essence, the memos mandated student loan servicers to help student loan borrowers navigate through the repayment process honestly. Currently, student loan repayments are managed and facilitated by for-profit loan servicers, such as Navient.

Ironically, Navient was sued back in January by the federal Consumer Financial Protection Bureau (CFPB) for illegally cheating borrowers “out of their rights and their money – as much as $4 billion – through patterns of deception and misapplying payments,” according to NPR.

DeVos wants us to believe that her rolling back the protections is in the interest of protecting tax-payers from paying for unnecessary services. In sum, if we compare Obama’s memos to DeVos’s new memo, it is clear that Obama was on the side of the student borrowers, while DeVos is on the side taxpayers, but both aimed at protection. Again, the irony here, and maybe a bit of insult, is the assumption that student loan borrowers don’t pay taxes or that they don’t need these protections.

According to Devos within her memo to James Runcie, the COO of the Federal Student Aid office:

The student loan servicing procurement affords [the Department of Education] a significant opportunity to improve outcomes and experiences for federal student loan borrowers, as well as demonstrate sound fiscal stewardship of public dollars. 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.

Betsy DeVos

She continued by adding that the Department of Education has a duty “to do right by both borrowers and taxpayers…”, again, as if the two sets couldn’t be the same people.

In my personal opinion, her intentions for withdrawing these protections are suspicious, to say the least. I’m curious as to how she intends to “create a student loan servicing environment that provides the highest quality customer service” while ensuring transparency to borrowers when these for-profit loan servicers are being sued for doing the exact opposite. As a side-note, in her confirmation hearing, DeVos mentioned that she had never borrowed money to go to school, and her children have been fortunate enough not have needed loans to go to college.

In late April, NPR reported that 20 state attorneys general offices, the District of Columbia, and a coalition of labor and community groups expressed their dissent towards DeVos concerning the withdrawn protections for borrowers. In addition, Navient, the for-profit student loan servicer who is currently being sued by the CFPB, expressed that they were being “unfairly singled out” by the federal Bureau. Even though, the CFPB reported that Navient topped their list when it came to consumer complaints between January and March of this year.

To conclude, Betsy DeVos’s leadership within the Department of Education has raised many eyebrows, and her appointments to key positions, such as the Civil Rights Office of DOE, have also raised questions. Her boss, President Trump, recently signed an executive order mandating that the DOE execute a 10-month review of laws and procedures to “ensure strict compliance with statutes that prohibit federal interference with state and local control over education.” As with many other important subjects, President Trump doesn’t seem to know what he is talking about. He expressed that one of the intentions behind signing this executive order was to prevent governmental overreach in education, but former President Obama’s ESSA Act was already moving towards this direction, after the nation ditched No Child Left Behind and Race To The Top. I guess it doesn’t hurt to double-down on alleviating federal control over education after the failures of both NCLB and Race To The Top.

What are your thoughts on the DOE rolling back protections for student loan borrowers and the direction of the DOE under Betsy DeVos?

Sources

  • Kamenetz, A., & Westervelt, E. (2017, April 15). nprED – This Week In Education: DeVos Hires; NY Announces Free College And Free Textbooks. Retrieved from NPR
  • Kamenetz, A., & Westervelt, E. (2017, April 29). nprED – Trump On Education Department: ‘Reverse This Federal Power Grab’ . Retrieved from NPR:
  • Kilpatrick, R. (2017, April 12). Education – Education Secretary Betsy DeVos Withdraws Obama-Era Student Loan Protections. Retrieved from Fortune


Izzy Okunlola is a Nigerian native who grew up in Providence, RI. He is a 2015 graduate of DePauw University and former youth organizer for Granite State Organizing Project in Manchester, NH. He is a bit of an introvert and a philosopher, but also loves to travel, enjoys photography, and appreciates all forms of art. He has been described as a young “renaissance” man, plagued by a compulsive obsession with time and food. You can reach him at Israel.okunlola@icloud.com.