Biden Revoked Trump Policy that Preempted State Oversight of Student Loan Services Industry

President Biden revoked Trump administration order that allowed former education Secretary Betsy Devos’ to debase state probes of malfeasant student loans, The revocation now paves the way for more vigorous investigations of the student loan services industry during Trump’s presidency.

The Education Department under DeVos’ leadership had contended that state regulations of the student loan service providers had prevented the federal government from exercising its oversight authority. Democratic lawmakers countered that on the contrary, it was the Trump policy that gave protection to student loan servicing companies against state investigations.

Democratic Senators Laud Education Secretary Cardona’s Recommendations

A group of Democratic senators led by Sen. Sherrod Brown, D-Ohio, and Sen. Elizabeth Warren, D-Mass. expressed their support for Education Secretary Miguel Cardona in recommending tighter regulations over the student loan servicing industry. Education Secretary Cardona’s recommendations included the revocation of the Trump order that prevented state regulators from conducting probes on student loan facilitators.

The Democratic legislators gave advice that the Education Department should go the extra mile in making sure that states have the full support of the federal government in holding loan servicing companies accountable.

The letter also mentioned that in the past few years, state Atty. Generals who lead the investigations of the activities of student loan servicers found patterns of misleading and abusive conduct. Such cases enabled the involved companies to collect substantial settlements from inequitable and malfeasant student loans.

As it is, around 43 million borrowers are drowning in increasing student debts amounting to $1.5 trillion, which federal statistics reveal affect mostly students of color. Nevertheless, since the start of Biden’s administration, the new U.S. President has cleared almost $10 billion with of student loans.

The most recent cancellations were the loans of students who enrolled at ITT Technical Institute, a for-profit college that closed due to misconduct. Still, the advocates of student debt cancellations, including a number of Democratic senators, sre requesting President Biden to do more.