Betraying Students: Worries That A Federal Student Loan Protection Program Will Be Gutted

By Anya Kamenetz
NPR (5/10/18)

It’s a single line in an email:

“The office of ‘Students & Young Consumers’ … will be folded into the office of ‘Financial Education.’ “

Words sent Wednesday morning by the Consumer Financial Protection Bureau’s acting director, Mick Mulvaney, announcing various staffing changes at the bureau.

Why did this bureaucratic-sounding announcement trigger a sheaf of critiques from consumer groups, California’s attorney general and at least two U.S. senators?

Because student loans just crossed the $1.5 trillion mark. They are the biggest category of borrowing after mortgages. And since 2012, when college students are mistreated or misled, the CFPB’s Student and Young Consumer division has been there to help:

  • They helped tens of thousands of active-duty military service members who were being overcharged for student loans, got the Justice Department involved, returned $60 million to the service members, and got the industry to change its practices.
  • They have collected and analyzed hundreds of thousands of student complaints.
  • They’ve recovered more than $750 million total on behalf of defrauded students.
  • They were instrumental in the shutdown of the for-profit ITT Tech and Corinthian Colleges, both accused of predatory practices.
  • In January of last year, CFPB sued Navient, the nation’s largest student loan company.

Students and Young Consumers, until recently, was a parallel program office to the office of Financial Education, so this reorganization looks an awful lot like a demotion. Former and current staffers at the bureau, who declined to use their names for fear of losing their jobs, tell NPR they believe this is a move to weaken their ability to protect student loan borrowers and other young people.

A former senior CFPB attorney agrees. “This is an appalling step,” says Christopher Peterson, a law professor at the University of Utah and a former enforcement lawyer and special adviser at the CFPB. “This has been an office that’s been out there protecting consumers when student loan debt collectors, predatory schools, and other companies have been violating the law.” …

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  • DeVos ‘Corruption Racket’ Continues As Education Dept Shuts Down Probes Into Predatory Colleges — Continuing her policy of turning a blind eye to the predatory behavior of private colleges at the expense of defrauded students, Education Secretary Betsy DeVos has reportedly derailed a special investigative unit within her department that was tasked with probing abuses by for-profit schools. According to the New York Times, which first reported on DeVos’s efforts Sunday, members of the team—established at the tail-end of the Obama administration—”have been marginalized, reassigned, or instructed to focus on other matters, according to current and former employees.” … Read the Rest

(Commoner Call carton by Mark L. Taylor, 2018. Open source and free for non-derivative use with link to )


‘War on Students’: Consumer Advocates Warn Mulvaney’s Moves At CFPB Will Lead To ‘Open Season on Borrowers’

By Jessica Corbett
Common Dreams (5/10/18)

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), announced Wednesday that the federal watchdog will effectively shutter its student loan division and shift its responsibilities to another office, a move that critics warn will lead to “open season on borrowers.”

The restructuring is part of Mulvaney master plan to, as the New York Times notes, “refocus the agency away from its consumer finance enforcement and rule-writing mission and more toward providing consumers with information about their legal rights”—in other words, to “defang” the CFPB, a long-time target of the acting director as well as President Donald Trump.

While a CFPB spokesman framed the shift as “modest,” insisting that agency personnel are “working on the same material as they were before,” career officials told the Timesthey fear it “will sidetrack a major enforcement case the agency is pursuing against Navient, the nation’s largest student loan collector.”

The move was also sharply criticized beyond the agency, by consumer advocates and at least one member of Congress.

Pointing out that “student loan debt is exploding,” Sen. Elizabeth Warren (D-Mass.)—one of the driving forces behind the creation of the CFPB—said that “it’s clear” the Trump administration “has declared war on students.”

“At a time when the number of and the size of student loans are spiraling out of control, it’s simply appalling to me that the administration is deciding to close the one office in the United States government that is exclusively focused on promoting fairness in student lending,” Christopher Peterson, a senior fellow at the Consumer Federation of America, told MarketWatch.

“Previously, the unit interacted with state law enforcement officials on student loan issues,” MarketWatch explained. “The agency also collected complaints, pushed companies to respond to them, and held firms accountable for inappropriate practices. Now it will likely focus more on simply providing information to borrowers.”

Challenging the CFPB’s new priorities under Mulvaney, Whitney Barkley-Denney, senior policy counsel with the Center for Responsible Lending, told the Associated Press, “Education alone cannot stop predatory behaviors on the part of for-profit schools and servicers, nor can it help hundreds of thousands of Americans in serious debt because of these practices.”

Wednesday’s announcement comes as Mulvaney, who also runs the Office of Management and Budget (OMB), faces mounting charges of corruption and calls for his resignation.

(This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.)

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College Costs Are America’s Cruel, Crushing Graduation Gift To Hardworking Poor Students

Dreams are dying amid the grim black ink of financial aid that doesn’t add up.


[Editor’s Note: This story is tragic on a personal level for the young people involved but it is also tragic on a societal level. Just think of the human capital and potential these students represent. We need their ideas, their intelligence and hard work in the future. We have already invested in them and now we are going to walk away from the promise they represent? Talk abut stupidity. Cut the tax giveaways to the rich and re-direct that money to these kids. As the GI Bill proved — investing in education is the single best thing a society can do for itself. — Mark L. Taylor]

By Larrry Strauss
The HuffPost (5/13/18)

Springtime at the school where I teach is usually a celebration of how far so many of our students have come. After years of hard work, often overcoming massive obstacles — poverty, violence, fractured families, inferior educational opportunities that did not prepare them for demanding and not always sympathetic high school teachers like me — graduation is supposed to be a moment of victory, a launching pad to greater success and a life full of possibility.

But more and more, I find those celebrations are tempered by a sudden cold slap from an indifferent world that cares little about the hard work of impoverished young people.

Kids euphoric one day about the colleges that want them, devastated the next when they realize an educational institution has been taunting them, insensitive to the realities of poverty.

These past few weeks, with commitment day looming, I’ve often found myself trying to console at least one — often three or four — students crying in my classroom or in the hallway outside. They are frustrated and hurt because they are coming to the conclusion that all that work was for nothing, that no matter their dedication, they cannot figure out how they will ever be able to pay for college.

Sticker Shock

According to the College Board, the average annual tuition for a private university has more than doubled over the last 20 years, from just over $15,000 to almost $35,000. The average tuition for a public university has more than tripled, from just over $3,000 to nearly $10,000 a year.

In more stark terms, the average expense for a year of tuition, fees, room and board at a public university is now more than 80 percent of the median annual wage of an American woman and more than 50 percent of the median annual wage of a man. The cost of college has risen almost three times as fast as wages.

When my wife and I filled out our first FAFSA more than a decade ago, we were surprised to discover that the income of two educators was above the threshold for receiving any need-based financial aid for our college-bound older daughter. It remained the case even a few years later when we had two daughters in college.

At the time, I understood the grim reality of limited resources. If there is only so much money available to subsidize college education, then it probably ought to go to those who need it most. But now, 12 years later, financial aid is covering less and less.

So you end up seeing what I saw last week — the financial statement of a student trying to become first in her family to attend college. Her federal financial aid determination was that her family contribution should be 0.

That’s ZERO. Nada. Not an unreasonable conclusion for a family living on less than $20,000 a year.

But that same student’s financial aid offer from the university she hoped to attend only accounted for about two-thirds of her tuition and expenses. Her family was somehow expected to come up with $5,000. Even the loans she was offered did not cover this.

Yes, some students still come out OK — those few who get a full ride based on merit and/or need and others who patch together enough scholarships and loans to get a degree without initiating a lifetime of debt. But that ought not obscure the very real crisis that is playing out right now, this week, in the halls outside my classroom and in other high schools across the country. …

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