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 WarrenElizabeth Warren tours immigration center: 'It's a disturbing picture' Mulvaney aims to cement CFPB legacy by ensuring successor's confirmation Trump calls Nevada Dem Senate candidate 'Wacky Jacky,' renews 'Pocahontas' jab at Warren 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 ShaheenDem senator: If Nielsen doesn't reunite families, 'she should resign' America will not forget about Pastor Andrew Brunson Shaheen sidelined after skin surgery MORE (D-N.H.), Roy BluntRoy Dean BluntGOP senators introduce bill to prevent family separations at border Ernst, Fischer to square off for leadership post Facebook gives 500 pages of answers to lawmakers' data privacy questions 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 FoxxTaxpayers and consumers alike should cheer defeat of the farm bill A call to service without debt Congress, pass the PROSPER Act for federal student aid reform 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.