Education secretary (and Ponzi-scheme billionaire heiress, anti-public-education crusader, and sister of notorious war criminal Eric Prince) Betsy DeVos just killed the recent Department of Education/Consumer Financial Protection Bureau guidelines that banned dirty bill-collectors from going after people with delinquent student bans.
The guidelines were enacted after the Government Accountability Office found that the Department of Education's outsourced debt-collectors were cheating borrowers and engaging in other corrupt, negligent and criminal practices.
DeVos sent a memo to the Department today that abolished the Federal Student Aid's duty to "consider servicers’ past behavior when awarding contracts, including whether the company had misled or provided wrong information to borrowers or engaged in abusive consumer service."
DeVos's memo didn't explain why she was allowing crooked debt-collectors to shake down citizens on the government's behalf, except to say that the existing guidelines lacked "consistent objectives."
Last year, the Government Accountability Office found an immediate need for significant improvement to the way in which the DOE contracts with and monitors the performance of servicers that handle billing and other services for borrowers.
The GAO report [PDF] found, among other things, limitations in borrowers’ access to federal service call centers, the department’s complaint tracking and other areas.
More recently, the CFPB sued Sallie Mae spin-off Navient, accusing the nation’s largest student loan company of allegedly cheating borrowers out of repayment rights.
The company recently provided an example of some of the issues consumer advocates see with student loan servicer, by explaining in a filing to the lawsuit that was under no obligation to actually help student loan borrowers.
Education Secretary DeVos Withdraws Protections For Student Loan Borrowers [Ashlee Kieler/The Consumerist]