FOR IMMEDIATE RELEASE: April 24, 2017
Contact: James Hallinan (505) 660-2216
Balderas Calls Out President Trump & Secretary DeVos for Turning their Backs on New Mexico Students
Albuquerque, NM – Today, Attorney General Hector Balderas sent a letter calling out the U.S. Department of Education for abdicating its responsibility to thousands of New Mexico student loan borrowers and their families by revoking critical reforms designed to help students avoid default and curtail loan servicer misconduct. The letter was sent today to Education Secretary Betsy DeVos in opposition to the Department’s recent rollback of guidance intended to protect student loan borrowers and reform the student loan servicing industry.
“President Trump and Secretary DeVos have turned their backs on thousands of New Mexico student loan borrowers and their families,” said Attorney General Balderas. “I will continue to use the full force of New Mexico law to crack down on predatory lenders, but the federal government must be accountable to New Mexico students as well.”
The guidance, issued by the Department of Education last year, centered on helping borrowers get accurate information about their loans and repayment options, ensuring the consistency of service provided by student loan servicers, increasing servicer accountability, and enhancing transparency. Critically, these reforms aimed to improve borrowers’ access to affordable loan repayment plans designed to help borrowers in distress avoid default. But the Department’s action earlier this month has instead left student loan borrowers vulnerable to poor practices and abuses that the servicing reforms were intended to prevent.
As explained in today’s letter, investigations and enforcement actions undertaken by state attorneys general and the CFPB have repeatedly uncovered student loan servicing misconduct. According to the letter, borrowers struggle under the weight of their student loan debt and federal student loan default rates are on the rise. In 2015, the CFPB estimated that more than 25 percent of student loan borrowers were delinquent or in default on a student loan.
“Many such borrowers would benefit greatly from entering income-driven repayment plans but are prevented from doing so by student loan servicer misconduct and misinformation,” the letter states.
Joining today’s letter are the attorneys general of Massachusetts, Illinois, California, Connecticut, Hawaii, Iowa, Kentucky, Maine, Maryland, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, as well as the Executive Director of the Office of Consumer Protection of Hawaii.
Please see attached for a copy of today’s letter.