Education Groups Urge Duncan To Protect Student Borrowers

Career College Central summary:

  • A prominent group of colleges, students, and teachers allege that the U.S. Department of Education fails to provide the basic consumer protections to students borrowers. The education group said the Department fails to enforce the law that is designed to offer consumer protections to millions of Americans who take out loans.
  • In a letter to U.S. Secretary of Education Arne Duncan on December 20th, the group, led by the workers rights organization Jobs With Justice, accused the Education Department of effectively allowing loan providers to violate the rights of student borrowers. “For many borrowers, economic hardship is just one of the hurdles standing in the way of paying back their federal student loans,” the group of students, educators and colleges said. “Borrowers also have to contend with inept, subpar and potentially illegal conduct on behalf of the loan servicing and debt collection contractors that are selected and supervised by the department.”
  • Every year, the Education Department pays private-sector companies hundreds of millions of dollars to collect payments on student loans and work with borrowers when they fall behind on their debts. However, the Department is making “little-to-no effort” to resolve longstanding complaints by borrowers and consumer advocates and hold companies accountable when they mistreat borrowers and violate their federal contracts, according to the group.
  • The letter, signed by the American Association of State Colleges and Universities, the American Federation of Teachers, the National Education Association, and the United States Student Association, among others, states that the federal department’s detrimental and misleading practices are harmful to borrowers and the department’s continued inaction will result in damaging its credibility in overseeing these contracts.

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