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Copyright 2014 by Attorney Carlos Gamino
to hatch a new plan from the mismatched patchwork of nine lenders who provided and serviced student loans. Under that system, borrowers described service as “shoddy,” and a study performed by the Consumer Financial Protection Bureau showed widespread problems at every stage of the borrowing and repayment process.
Obama’s plan would have created a single federal portal where borrowers could access their accounts and interface with their own information. The entire process would be subject to government oversight—unlike it is now—to ensure that student borrowers were receiving the same protections you expect with a mortgage or car loan.
DeVos’s memo rescinding Obama’s guidance doesn’t provide any new ideas; it just strips away what Obama wanted to do. The memo came as 2017 student loan figures were released, which show:
- The average monthly student loan payment for someone aged 20 to 30 is $351
- The student loan delinquency rate is 11.8 percent (this is for loans that are 90 days or more delinquent or in default)
- The average debt per borrower is $28,400
- $11.5 billion-worth of student loans are in default
The Department of Education’s projected profit off these loans over the next 10 years is $127 billion, while student loan debt is the second-highest form of debt in the U.S. (right behind mortgage loans).
What Do You Think?
Do you have student loans that you’re still paying on? I’d love to hear what you think of DeVos scrapping the federal portal system for student borrowers—and what you think about the fact that the Department of Education stands to make $127 billion over the next decade while slashing funding for public schools. Please feel free to share your thoughts on my Facebook page or on Twitter.
Secretary of Education Betsy DeVos is ultimately responsible for administering more than $1.3 trillion in student loans that cover almost 43 million student borrowers in the U.S.
Former President Barack Obama worked
News from Attorney Carlos Gamino
DeVos Puts the Brakes on Obama-Era Protections for Student Borrowers
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