Two members of Utah’s all-Republican congressional delegation have joined Democratic colleagues in pushing back against recent moves by the U.S. Department of Education to restrict state oversight of student loan providers.
In a letter to U.S. Education Secretary Betsy DeVos, dated Wednesday, Utah Reps. Mia Love and Rob Bishop ask DeVos to withdraw her department’s recent position that states lack the authority to regulate private lenders contracting with the federal government.
“The Department’s interpretation attempts to create broad new legal standards not intended by Congress under the Higher Education Act and undermines state efforts to protect tens of millions of Americans with student debt,” said the letter, with additional signatures by Rep. Suzanne Bonamici, D-Ore., and Rep. Jared Polis, D-Colo.
In March, DeVos announced that federal law pre-empts states from taking regulatory action against student loan companies that participate in the U.S. Department of Education’s financial aid programs.
Her directive came amid mounting tension between private lenders and state lawmakers, who have sought to protect students from predatory lending practices and ballooning education debt throughout the nation.
In a written statement, Love said her concerns are focused on students who are not properly served by some lenders.
“Those companies should be held accountable, and I’m troubled by the department’s plan to pre-empt states from any oversight of these bad actors,” Love said. “I’m concerned that this move will only result in less transparency and accountability from the servicers, and in turn, will result in ever worse service for our students.”
Bishop, in a statement, said issues related to private lenders are best managed by states.
“States, not the federal government, are best positioned to safeguard against the varied threats faced by student borrowers,” Bishop said.
In their letter, members of Congress argue that individual states have an important role in consumer protection, including enforcing regulations that protect residents from “predatory, unfair and deceptive business practices.”
“We urge the Department of Education to consider the views of the state officials closest to the effects of the student debt crisis on millions of Americans in all 50 states,” they wrote, “and respond by withdrawing its recent interpretation.”
