Finance

Dems call on DeVos to work with CFPB to protect student borrowers

Congressional Democrats are calling on Education Secretary Betsy DeVos to reverse course and reinstate agreements with the Consumer Financial Protection Bureau to protect student borrowers from student loan fraud.

Earlier this month, DeVos reportedly canceled agreements with the CFPB from 2011 and 2013, claiming the bureau had used Education Department data to expand its oversight role to include the department's contracted federal loan servicers, overstepping its boundaries.

In a letter to DeVos on Thursday, Sens. Sherrod Brown (Ohio) and Patty Murray (Wash.) along with Reps. Maxine Waters (Calif.), Rep. Bobby Scott (Va.) and 39 other members of Congress said revoking these agreements reflect "a fundamental misunderstanding" of the Education Department's authority and that of other federal agencies.

"While the Department does have authority to administer federal student loan programs, that authority is not exclusive and have been intentionally constrained by law due to the Department's historical negligence in carrying out many of its oversight responsibilities over federal student loan services," they wrote.

The lawmakers said multiple federal regulators and law enforcement agencies serve important roles overseeing companies that contract with the department to service federal student loans.

"Our country's investment in affordable higher education provides individuals with the skills they need to participate in the 21st century economy," the lawmakers wrote. "Unfortunately, the Department's recent actions to abandon cooperation with the CFPB come during a time when it is also systematically rolling back rules meant to protect student and making numerous questionable personnel decisions."

The Democrats asked DeVos to provide them with any communications the department has had with CFPB staff about data sharing concerns, any communications the department has had federal education loan servicers and any policy plans the Department has to increase oversight of federal student loan servicers.

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