Warren and Brown Urge Cordray to Continue Protecting Students Despite Roadblocks by DeVos
Letter Follows DeVos Termination of Information Sharing Agreements that Help CFPB Protect Student Borrowers
Washington, DC - In a letter sent today, United States Senator Elizabeth Warren (D-Mass.) and Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) urged Consumer Financial Protection Bureau (CFPB) Director Rich Cordray to continue the CFPB's work to protect students from "unfair, deceptive, and abusive acts" by federal student loan servicers and debt collectors. The letter followed an announcement by Education Department (ED) Secretary Betsy DeVos that ED has terminated information sharing agreements with the CFPB, an effort that has aided oversight of servicers and helped protect borrowers.
The announcement shows that ED is going "out of its way to protect its servicers from real oversight and accountability," and is "another example of Secretary DeVos's acting in favor of the profits of private student loan companies rather than the rights of students and borrowers."
With 40 million Americans owing more than $1.4 trillion in student loan debt and more than one in four borrowers either delinquent or in default on their student loans, the Senators urged that borrowers need diligent oversight of the student loan servicing industry. The Senators also noted specific actions taken by the CFPB that have helped borrowers.
"In addition to providing greater oversight and transparency, the CFPB has improved the student loan industry by rooting out illegal practices in the student loan servicing market and taking legal action against servicers that break federal consumer protection law, just as Congress intended. Simply put, no federal agency or department has done more to curb abusive practices in the student loan industry than the CFPB," the Senators wrote. "CFPB's role of enforcing federal consumer protection laws has become more important than ever. The Department, under Secretary DeVos, has taken steps that endanger students and make it more difficult to identify and stop student loan contractors and fraudulent for-profit colleges that are breaking the law," wrote Senators Warren and Brown.
In the letter, the Senators ask the CFPB to provide communications between the CFPB and ED regarding the termination of information sharing, a summary of illegal practices uncovered by previous information sharing, and the impact this termination will have on student loan borrowers.
This letter is the latest in an ongoing oversight effort to hold Secretary DeVos accountable for putting profits ahead of students. Follow more DeVos Watch developments here.
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