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DeVos Attacks Students' Rights In Attempt To Protect Loan Servicers

WASHINGTON, DC – Department of Education Secretary Betsy DeVos issued a notice today interpreting the Higher Education Act as preventing the enforcement of state consumer protection laws over the servicers of federal student loans. Secretary DeVos’s action in this regard has been opposed by a bi-partisan group of more than twenty-five state Attorneys General and stands in stark contrast to the growing number of states that have enacted in a bi-partisan manner to adopt borrower bills of rights.

“By seeking to bar state consumer protection laws, Secretary DeVos is not only impeding fair enforcement of laws by state attorneys general, but she is effectively trying to strip every single student loan borrower of the right to sue a loan servicer for unfair, deceptive, or abusive acts or practices,” said Aaron Ament, President of the National Student Legal Defense Network.

“To be clear, Secretary DeVos’ pronouncement is worth very little in terms of legal weight,” added Ament. “We are not aware of a single court that has ever held that the regulation of loan servicers is ‘governed exclusively by Federal law,’ as the Department of Education now maintains.  In contrast, the Department itself has repeatedly and recently noted the important role that state consumer protection laws play in policing the conduct of loan servicers. We look forward to the judicial branch resolving this attempted overreach.”