Tuesday April 23, 2024
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Beshear Opposes Rollback Of Student Loan Protections

Attorney General Andy Beshear today joined with other state attorneys general to send a letter to federal officials expressing concern over the withdrawal of critical student loan servicing reforms.

The multistate letter – co-sponsored by Massachusetts Attorney General Maura Healey and Illinois Attorney General Lisa Madigan, and joined by 19 attorneys general and the Office of Consumer Protection of Hawaii – was sent today to the U.S. Department of Education Secretary Betsy DeVos in opposition to the Department’s recent rollback of guidance intended to reform the student loan servicing industry.

“Federal student loan default rates continue to rise across the country and many face crushing loan debt and credit score ruin,” said Beshear. “The Department has abandoned its responsibility to millions of student loan borrowers and their families across the country. Borrowers are now left more susceptible to poor practices and abuses that the servicing reforms were intended to thwart.”

The guidance, issued by the Department of Education last year, centered on helping borrowers get accurate information about their loans and repayment options, ensuring the consistency of service provided by student loan servicers, increasing servicer accountability, and enhancing transparency.

The reforms also aimed to improve borrowers’ access to affordable loan repayment plans designed to help borrowers in distress avoid default and curtail loan servicer misconduct.

Beshear said the letter provides a voice for those borrowers who regularly file complaints with the attorneys general about not receiving the necessary guidance from their loan servicers to make sound decisions about repayment.

According to the letter, borrowers struggle under the weight of their student loan debt. In 2015, the Consumer Financial Protection Bureau estimated that more than 25 percent of student loan borrowers were delinquent or in default on a student loan.

“Many such borrowers would benefit greatly from entering income-driven repayment plans but are prevented from doing so by student loan servicer misconduct and misinformation,” the letter states.

Joining today’s letter with Attorney General Beshear are the attorneys general of Massachusetts, Illinois, California, Connecticut, Hawaii, Iowa, Maine, Maryland, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, as well as the Executive Director of the Office of Consumer Protection of Hawaii.

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