Attorney General Andy Beshear and a coalition of attorneys general sent a letter to the U.S. Department of Education, demanding the department stop rolling back critical protections for student loan borrowers.
“College tuition has never been more unaffordable, and Kentucky students deserve to be protected from those who seek to mislead them,” Beshear said. “If the U.S. Department of Education will not stand up for our students, my office will.”
In the letter, Beshear and 18 other state attorneys general outline their concerns with recent actions taken by the department to terminate agreements with the Consumer Financial Protection Bureau (CFPB). The agreements and regulations protect student borrowers from deceptive practices by for-profit schools and federal loan servicers.
The letter highlights the outstanding work the CFPB has done to protect students and families, including cracking down on abusive for-profit colleges and halting illegal loan servicing practices. The CFPB has worked with state attorneys general to create an online tool that helps students plan for college financial aid offers and loan commitments.
The letter specifically states the department falsely asserts it has exclusive jurisdiction over companies that service federal student loans when, in fact, student loan servicers are under the jurisdiction of the CFPB, Federal Trade Commission, Department of Justice, attorneys general and other law enforcement agencies.
The actions come at a time when the department released new data showing that student loan default rates have grown for the first time in five years, and that more borrowers are not making payments on their federal student loans within three years of graduating college.
Beshear said the department’s actions make it more difficult for the CFPB to assist and protect student borrowers, which ultimately hurts Kentucky students and unfairly benefits loan servicers, for-profit colleges and their executives and investors.
The letter is the latest in a series of acts by the Department of Education to strip critical protections from millions of students and families repaying student loans.
In July, Beshear and 20 other state attorneys general submitted public comments in response to the department’s announcement of intentions to delay large portions of the Borrower Defense Rule, which was designed to hold abusive higher education institutions accountable for cheating students and taxpayers out of billions of dollars in federal loans.
The attorneys general opposed the department’s efforts to replace the Gainful Employment regulations that empower students to make informed decisions about their education, and protects students from burdensome debt and poor job prospects.
Beshear’s office is committed to holding for-profit colleges accountable in Kentucky and is working to help defrauded students.
To date, the office has helped more than 9,000 students receive more than $25.5 million in restitution, including debt relief, from predatory lenders and for-profit colleges.
Beshear said students who have been a victim of a for-profit college or predatory loan practices may contact his office by phone, 502-696-5300 or by completing an online complaint form.