Secretary of Education Betsy DeVos's war on student borrowers

[progree]

As Protections for Borrowers Fall, What to Do If You Face Trouble Repaying a Student Loan, Consumer Reports, 4/14/17

“The (Obama era) guidelines that were taken away laid out really basic, commonsense guidance for how servicers should act so that borrowers can navigate repayment,” says Suzanne Martindale, a staff attorney and education debt expert at Consumer Reports. “Removing these is incredibly shortsighted and will likely cause greater problems down the road for students and families.”

The guidelines called for major changes in student loan servicer practices, including new standards for responding to borrower problems in a timely way, providing economic incentives to give high-quality customer service, and imposing penalties for poor performance.

In March, DeVos rescinded a 60-day grace period to allow students in loan default to get back on track and avoid a fee of 16 percent of their loan balance.

Also last month, the Education Department said it would delay implementing the gainful employment rule, an Obama-era regulation that penalizes college vocational programs if graduates accrue more debt that they can pay with post-grad earnings.

Last month, the CFPB reported a 429 percent increase in student loan complaints about servicers from December through February, compared with the prior year. Consumers say servicers process payments incorrectly, make it harder for them to enroll in more affordable payment plans, and fail to act when borrowers complain.

Much More: https://www.yahoo.com/news/protections-borrowers-fall-face-trouble-184224571.html

Dunno if the 429% increase in problems in December through February, compared to the prior year, has anything to do with the current administration compared to the previous administration..... should I set up a poll?

More from the article:

Federal student loans in default are up 15% from 2015.

Problems with Navient, tsk tsk (spun off from Sallie Mae - the largest servicer of federal student loans)

How to Handle Problems With Your Student Loans

[Warpy]

1. Her solution is the same as Asshole's

"Just borrow a million dollars from Daddy. Anybody can do that."

[Sculpin Beauregard]

2. I heard she sleeps with her brother.

She's a ghoul either way.

[progree]

3. The rationale for why the regulations needed to be streamlined

The companies ((that service the loans and collect payments)) are for-profit enterprises that tend to have lower-skilled, lower-paid workers. The workers make their money by achieving repayment results, not by dispensing advice to borrowers.

Oh, OK. I understand now

[Igel]

4. The problem's more basic.

First, the report's here.

http://files.consumerfinance.gov/f/201509_cfpb_student-loan-servicing-report.pdf

It's pretty meaningless as far as information is concerned; but it's great advocacy. You can't tell what the most common problems are; but you can tell those what the writers thought the most egregious, whether reported by 0.01% or 99% of the respondents. It's like a soil sample where the analysis shows the presence of gold and lithium and uranium--and to deny that the soil bears these commercially valuable elements would be to cover up the truth. Then, perhaps in small print, perhaps after leaving the podium after announcing the results, you whisper that the elements are only present at several ppb.

Point is, you can't tell from the report. They make a big deal about all the data they got, but then don't actually say what their data are. It's advocacy, it's agitprop, and that's distinct from data or reporting.

Second, the problem is that they want those servicing the loans to be financial counselors. They have to keep track of dozens of programs affecting a dozen types of loans, and how they interact when one person has several loan types. They need to be on top of what regulations are for each loan type, what counts as documentation for what purpose. Then if the person owing gives you wrong information, you would reply with bad information; it's unlikely that most people would respond to a survey and say, "Well, I got crappy information, but then again I didn't understand what the questions were. I gave crappy information and got crappy information." No, somebody's who's aggrieved will start with the first part and then just stop before continuing to say how crappy the information was that they got.

Objectivity in a post-Enlightenment culture is increasingly rare.