AG TONG, 21 STATES OPPOSE DEVOS ATTEMPT TO UNDERMINE INVESTIGATIONS INTO STUDENT LOAN INDUSTRY
Attorney General William Tong joined a coalition of 21 state attorneys general led by Washington, New Jersey, and Colorado in a letter to Department of Education Secretary Betsy DeVos to renew their request that the Department reverse limitations placed on the routine disclosure of student loan information to state law enforcement agencies.
"Connecticut and other state attorneys general have active investigations into bad actors in the student loan industry. We rely on information disclosed by the Department of Education in these important investigations. Abruptly shutting off access to this information is an inexplicable gift to the bad actors in this industry, and a blow to students and consumers across the country," said Attorney General Tong.
In June 2018, without notice or opportunity for public comment, the Department changed its longstanding policy of routinely disclosing information about student loan borrowers to state law enforcement agencies. This includes state attorneys general working to protect students and student loan borrowers from predatory practices and to secure relief for those victimized by fraud and other unlawful conduct.
In July 2018, 20 state attorneys general wrote to the Department to urge reversal of this change. The letter sent today renews their request.
The attorneys general note several reports, including one by the Department’s own Inspector General, that identify concerns with the Department’s oversight of student loan servicers, private companies that contract with the Department to service the student loans the Department owns. The attorneys general write: “Dual oversight in this arena has become particularly important in recent years, as concerns mount about these companies’ compliance with the requirements for servicing federal student loans and consumer protection laws enforced by State Attorneys General.”
State attorneys general have taken numerous actions to enforce state consumer protection laws against servicers. They have also taken action to stop widespread fraud in the for-profit education sector and the student loan debt adjustment sector. These actions have secured significant relief for struggling borrowers in states across the country.
“The state attorneys general are in a unique position to ensure that the servicers are conducting their businesses in compliance with consumer protection law and have been active in enforcing state consumer protection laws against servicers,” the attorneys general write. “This inexplicable move by the Department impedes the efforts of law enforcement agencies to protect the students the Department exists to serve.”