Trump administration blocked consumer watchdog from public service loan forgiveness program: report

Trump administration blocked consumer watchdog from public service loan forgiveness program: report
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President TrumpDonald John TrumpBiden adds to vote margin over Trump after Milwaukee County recount Krebs says allegations of foreign interference in 2020 election 'farcical'  Republicans ready to become deficit hawks again under a President Biden MORE's Department of Education reportedly blocked the Consumer Financial Protection Bureau's (CFPB) efforts to investigate high rejection rates among applicants for a student loan forgiveness program meant to aid firefighters, police officers and other public servants.

NPR reported Tuesday that Education Department officials blocked companies that operate student loan call centers from providing information to the CFPB investigators, effectively ending the bureau's efforts to probe why applicants for the Public Service Loan Forgiveness Program are denied at such a high rate. The Education Department reports that just about 1 percent of applicants to the program are accepted.


Several sources familiar with the bureau's investigation efforts told NPR that the Education Department's interference directly contributed to the CFPB failing to adequately address issues with the loan forgiveness program.

"It's 100 percent clear that the Public Service Student Loan Forgiveness Program is badly broken; it needs to be fixed," Christopher Peterson, a former CFPB attorney, told NPR. "And we have teams of seasoned, trained accountants and lawyers whose job and expertise is fixing exactly that type of thing. But instead of sending them in, we're just leaving them on the sidelines and the problem's not getting solved."

The Education Department's efforts reportedly led to several Democratic senators including Sens. Elizabeth WarrenElizabeth WarrenThomas Piketty says pandemic is opportunity to address income inequality The Memo: Biden faces tough road on pledge to heal nation Disney laying off 32,000 workers as coronavirus batters theme parks MORE (D-Mass.) and Sherrod BrownSherrod Campbell BrownOn The Money: Democrats accuse Mnuchin of sabotaging economy in dispute with Fed | Trump administration proposal takes aim at bank pledges to avoid fossil fuel financing | JPMorgan: Economy will shrink in first quarter due to COVID-19 spike Democrats accuse Mnuchin of sabotaging economy in dispute with Fed McSally, staff asked to break up maskless photo op inside Capitol MORE (D-Ohio) sending letters earlier this year to various loan servicing companies accusing them of "ignoring federal regulators' requests for information" and Education Secretary Betsy DeVosElizabeth (Betsy) Dee DeVosNational reading, math tests postponed to 2022 amid coronavirus surge Women set to take key roles in Biden administration America has a civic education problem — here's how to fix it MORE of "remov[ing] the most potent weapon from the CFPB's arsenal to fight illegal behavior and mistreatment of borrowers by student loan servicers."

Angela Morabito, press secretary for the Education Department, contended to NPR that the agency was committed to a partnership with the CFPB to root out illegal behavior, and would require any request for private information from companies to be sent first to the DOE.

"In order to protect student privacy, we ask that any requests for information from servicers be sent directly to the Department," said the spokesperson. "We are currently working closely with the CFPB on protecting student borrowers from third-party debt relief fraud."