Sumary of Elizabeth Warren says states need more power to rein in student-loan companies: ‘They should face consequences’:
- Biden recently reversed a Trump-era policy that prevented states from regulating those companies.
- Last month, the Education Department reversed a Trump-era policy that prevented states from regulating student-loan companies.
- Sherrod Brown led six of their Democratic colleagues in urging Cardona in a letter to go beyond the reversal of President Donald Trump’s policy and provide additional protections to borrowers, such as requiring loan companies to be licensed or have in place complaint processing protocols.
- But Trump’s Education Department changed that with a memo that said the Privacy Act of 1974 prevented student-loan servicers from supplying state regulators with any documentation unless the department approved.
- For example, Massachusetts Attorney General Maura Healey recently reached a settlement with one company that services student loans -the Pennsylvania Higher Education Assistance Agency (PHEAA) – requiring a correction of any borrower that may have been harmed by the company’s “errors and misconduct,” affecting more than 200,000 borrowers.