DeLauro Joins More than 130 Members in Calling on DeVos to Reinstate Student Loan Protections

WASHINGTON, DC (April 26, 2017) — Congresswoman Rosa DeLauro (CT-03) today joined more than 130 Members of Congress in sending a letter to Secretary of Education Betsy DeVos urging her to reverse a decision to rescind Obama-era memos on student loan servicing reforms. The reforms had included new consumer protections for borrowers and improvements to the quality of federal loan servicing. DeLauro is the Senior Democrat on the Appropriations subcommittee responsible for funding the Department of Education.

"Your decision to rescind these memos—including the guidance making servicers' past performance and record of compliance with the law the most important non-cost factor in the evaluation—will put millions of borrowers and taxpayers at risk," wrote the Members. "Without accounting for past performance, federal contracts will be open to bidders that have previously violated state or federal consumer protection laws, mistreated members of our military, and consistently ignored the needs of their borrowers."

"With one in four student loan borrowers in default or delinquent on their federal student loans, it is the responsibility of the Department to address the student debt crisis and ensure that all service providers in the student loan program are doing everything they can to put students and families first ahead of the profits of student loan companies," continued the Members.

On April 11, 2017, the U.S. Department of Education announced Secretary DeVos was rescinding three critical policy memos intended to reform the student loan servicing process meant to better assist borrowers in managing their loans, hold servicers accountable, and set financial incentives that will best support the interest of students. The memos were issued by the Obama Administration following a request from Senate Democrats for common-sense improvements to the student loan servicing process. House Democrats also requested the Department continue to improve the student loan collection and servicing processes for struggling borrowers. After DeVos's latest action, it is unclear how the Department intends to move forward with the current contracts for student loan servicing which are worth more than $840 million per year.

The full letter is available here.

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