Just kidding! Betsy Devos is NOT focused on Students. She has once again proven she is on the side of business’ best interests. She has ended the relationship between the Education dept. and the Consumer Financial Protection Bureau (CFPB). A special thanks to Donald Trump being a distraction as he dismantles the government. We now have the CFPB now taken out of the Department of Education.
Devos said “the CFPB has overreached and expanded it’s jurisdiction.” In the article it’s quoted that it was a mistake for the Student loans and Student Loans Servicing under the Department of Education. This is what the Obama administration did.
She is transferring responsibilities over to the Federal Trade Commission and the Department of Justice by also stating that “protecting students is a top priority.”
Betsy Devos also hired some new people this week. One of which is a former for profit College dean who is now in charge of the Anti-Fraud Squad. This is hilarious considering the paragraphs above in which she just announced she’s ending the relationship with the CFPB.
So…what has the CFPB done for students since it’s inception? As of July 2016 on their website;
ITT Educational Services – For-profit college sued for predatory student lending: The CFPB sued ITT Educational Services, Inc., alleging that ITT exploited its students and pushed them into high-cost private student loans that were likely to default. The complaint seeks restitution for victims, a civil penalty, and an injunction against ITT. The lawsuit is currently pending.
Corinthian Colleges – For-profit college sued for predatory lending scheme: The CFPB sued Corinthian Colleges, Inc. for illegally luring tens of thousands of students into taking out expensive loans to cover tuition costs by advertising bogus job prospects and career services. The federal court entered a final judgment against Corinthian and ordered that the company is liable for more than $530 million and prohibited from engaging in future misconduct.
ECMC Group – $480 million in consumer relief for current and former Corinthian College students: The CFPB, together with the Department of Education, negotiated more than $480 million in forgiveness for borrowers who took out private student loans from Corinthian Colleges, one of the nation’s largest for-profit schools. ECMC Group, the new owner of a number of Corinthian schools, also agreed not to operate a private student loan program for seven years and agreed to a series of new consumer protections.
Discover Bank – $16 million consumer refund for illegal private student loan servicing practices: The CFPB ordered Discover Bank to pay $16 million in refunds to consumers and a $2.5 million civil penalty for overstating the minimum amounts due on billing statements and denying consumers information they needed to obtain federal income tax benefits. The company also engaged in illegal debt collection tactics, including calling consumers early in the morning and late at night.
Student Financial Aid Services, Inc. – Company offering fee-based FAFSA assistance sued for illegal recurring billing scheme: The CFPB filed a proposed order against Student Financial Aid Services, Inc. that would halt its illegal practices and require the company to pay $5.2 million for illegal sales and billing practices. The Bureau alleged that the company, which until recently operated FAFSA.com, lured in consumers with misleading information about the total cost of its subscription financial services and hit them with undisclosed and unauthorized automatic recurring charges.”
The biggest one and most recent is Navient. Navient has 3 lawsuits for “Among other things, the CFPB alleges that since at least January 2010, Navient misallocated payments, steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release. The CFPB is asking Navient to compensate the borrowers the agency says were harmed.”
Luckily, as of Aug 7, 2017 Navient’s the motion to dismiss all three lawsuits was denied by a judge. Future situations like this could change now that the CFPB is no longer in association with the Department of Education.
Considering how many Millennials are affected by student debt. How many of them are being fraudulently mislead by lenders? Our generation is losing these protections. Once again proving our government for businesses and not protecting the Millennials. Thank you Betsy Devos.