Betsy DeVos Removes Obama Era Protections For Students Who Default On Their Loans
Department of Education Secretary Betsy DeVos has rolled back Obama-era memoranda that allowed more leeway for higher education students to mismanage or default on their student loans.
The guidelines, issued under Obama’s Department of Education, shifted the federal government’s focus from collecting student loan debts to debt management or even informing students how to discharge their college debts.
United Press International reported that the Obama guidelines had four primary objectives:
To inform delinquent borrowers about income-based repayment programs before demanding a payment.
To make efforts to contact borrowers who are at risk for default and explain the options.
To create a team of trained customer service representatives who immediately handle the needs of struggling borrowers.
To Inform borrowers about possible loan cancellation options before discussing repayments.
Secretary DeVos was critical of the Obama guidelines, accusing them of providing “a myriad of moving deadlines, changing requirements, and a lack of consistent objectives.”
“We now find ourselves in a situation where we must promptly address not only these shortcomings but also any other issues that may impede our ability to ensure borrowers do not experience deficiencies in service.”
According to Bloomberg, during the eight years that Obama was in the Oval Office, America saw 8.7 million Americans defaulting on their student loans. The news site estimated that to be an average of roughly one every 29 seconds.
The Trump administration is going to be focusing more on the collection of student loans rather than alleviating the burden that the loans create on graduating students.
Devos also laid out the goals of the federal government provided student loan services.
“Our mission in the student loan servicing procurement process is to provide high quality customer service to federal loan borrowers in a cost-efficient and effective manner.”
What do you think about Education Secretary DeVos’ decision to roll back the Obama-era memoranda that made it easier for students to default on their loans?
Source: Ed.gov- press release