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States Respond to Decrease in Student Loan Servicer Oversight

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Here’s what Inside Higher Ed reporter Andrew Kreighbaum recently wrote about the current administration’s reduction of student loan servicer oversight: “After the Trump administration dialed back oversight of student loan servicers, states have responded to demands from consumer groups by passing new laws targeting companies that handle millions of borrowers’ payments.“ Kreighbaum added, “Lawmakers in a growing number of states have sought to tackle student debt as a consumer protection problem. Over the first half of 2019, legislatures have enacted a flurry of bills taking aim at the companies that process and handle payments on the roughly $1.5 trillion in outstanding federal student loan debt.” The story also noted that “New state regulations are testing arguments by Education Secretary Betsy DeVos and the Trump administration that only the federal government, and not the states, has the authority to police loan servicers. Recent court rulings, though, appear to have only strengthened the hand of states seeking to wield more oversight powers. Seven states so far this year have passed laws requiring loan servicers to meet consumer protection requirements.”

 

Posted October 4, 2019