Colorado Can Stop Student Loan Predators

As reported in The Intercept, the Department of Education, headed by Secretary Betsy DeVos, is trying to limit states’ ability to regulate student loan predators. The mandate, which has been expected for months, does the exact opposite of what borrowers across the country need: protects student loan servicers and their predatory practices.

Related: Coalition Event Spotlights Predatory Student Loan Servicers

Consumer advocates and plenty of state attorneys general disagree. If companies operate in a state’s borders and collect loan payments from its residents, the state has the right to oversee said company. As much was said in letter from 25 state AGs opposing the plan, including Colorado’s own Cynthia Coffman. In a statement to Politico, Coffman said the Department of Education “simply does not have the authority to unilaterally preempt the right of states to protect their citizens from student loan servicers and debt collectors who violate state consumer protection law. I am concerned that this attempted federal overreach will have very detrimental consequences to consumers.”

Related: The Fallout of the DeVos Delay

More than ever, Colorado needs to wrangle student loan predators. Outstanding student loan debt now totals $24.75 billion across the state, outpacing all other debt outside of mortgages. Adding insult to injury, federal student loan servicers often operate deceptively and inappropriately collect on these debts. In fact, the largest servicer in the country is being sued for defrauding over 1.5 million borrowers and adding over $4 billion to the cost of borrowers’ loans.

Related: Coalition Members Pen Open Letter to Betsy DeVos

What can Colorado do to stop student loan predators? Find out more by reading our fact sheet on the issue and learning more about the need for stronger investment in postsecondary education.

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