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DeVos abandons student loan servicing overhaul

DeVos abandons student loan servicing overhaul

Education Secretary Betsy DeVos on Tuesday announced she is scrapping her plan to consolidate the nation’s federal student loan service providers.

DeVos’s original plan — to select just one company to collect student debt payments on the federal government’s behalf — faced bipartisan backlash, including two Republican senators who signed on to legislation that would have blocked it.

DeVos said in a statement that the Education Department will instead pursue “a truly modern loan servicing environment,” adding that “we have a chance to turn what was a good plan into a great one.”

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Sen. Elizabeth WarrenElizabeth Ann WarrenGovernment watchdog finds safety gaps in assisted living homes David Crosby: Shared dislike for Trump could reunite Crosby, Stills, Nash and Young Dem senators tell Trump he doesn’t have ‘legal authority’ to launch preemptive strike on North Korea MORE (D-Mass.) celebrated the announcement on Facebook but pledged to keep a close eye on DeVos moving forward.

“Today the Education Department announced that it will reverse its single loan servicer plan – and I’m glad that they are changing course,” she wrote.

“But it will be important to continue watching the Education Department and Betsy DeVos to evaluate whether its decisions are good for the millions of struggling student loan borrowers.”

Warren teamed with Sens. Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenSenators call for probe into US Olympic Committee, USA Gymnastics after abuse scandal Trump officials take heat for declining Russia sanctions Schumer to Trump administration: Who met with Putin's spy chief? MORE (D-N.H.), Roy BluntRoy Dean BluntHouse passes bill to ease menu labeling rules under ObamaCare Heroin Task Force presses Congress for more funding to fight opioid epidemic Senate Republicans call on Trump to preserve NAFTA MORE (R-Mo.) and James Lankford (R-Okla.) on Tuesday to unveil a bill that would block DeVos’s plan, requiring the Education Department to maintain multiple student loan services.

Other Republican lawmakers praised DeVos’s move to scrap her original plan. A spokesman for House Education Committee Chairwoman Virginia FoxxVirginia Ann FoxxStudents drowning in debt bewildered by claims college is a 'hammock' GOP bill scraps voter registration requirements for colleges GOP looks to scrap Obama-era rule on college credit hours MORE (R-N.C.) told Politico that DeVos “made the right decision to cancel the single-servicer proposal.”

Lawmakers opposed the consolidation out of concerns that it would give too much power to one company, reduce competition and leave student borrowers more vulnerable.

The Education Department had argued when it unveiled the plan in April that it would simplify student loan borrowing and reduce costs.