How the STUDENT LOAN INDUSTRY Lobbied Devos To Fight State Regulations; Navient
The Trump administration’s attempts to shield some student loan companies from new state regulations began after the industry waged a furious lobbying campaign, which included the head of student loan giant Navient, emails obtained by POLITICO show. Aug. 15, 2019.
Jack Remondi, chief executive officer of Navient, personally emailed a top aide to Education Secretary Betsy DeVos urging the administration to “quickly” declare that states lacked the authority to police the companies that, like his, collect federal student loans.
Remondi and other industry heavyweights were trying to enlist the Education Department’s help to fend off the growing trend of states considering or passing new laws to crack down on student loan servicing companies. The states were responding to allegations of misrepresentations and other abuses in the industry, which manages the student loan payments of the nation’s more than 45 million student loan debtors..
DeVos in March 2018 issued a notice declaring that federal law preempts state regulation of companies collecting federal student loans. The move drew criticism from state attorneys general, state banking regulators and the National Governors Association. Consumer advocates argued that states have the right to oversee companies operating within their borders that collect loan payments from their residents.
Student loan servicing companies have long opposed the new wave of state regulations..The trove of more than 2,000 pages of emails outlining the industry lobbying efforts was obtained by POLITICO from the National Student Legal Defense Network, which sued the Education Department to get them under the Freedom of Information Act. “These emails are proof the Trump Education Department takes its marching orders from the very same servicers that have been failing students,” said Sam Gilford, the group’s director of external affairs. “At Navient’s urging, Secretary DeVos attempted to give them a virtual get-out-of-jail-free card, hoping to insulate the company from lawsuits brought by state AGs and individual students.”..
The Trump administration has said that states can’t regulate the companies that collect federal student loans for the sake of nationwide consistency. “Despite lobbying efforts on both sides of this issue, we’ve been clear from the beginning that Federal student loans are a federal asset and they must be federally regulated,” Education Department spokesperson Liz Hill said on Wednesday. “A piecemeal, state-by-state approach to regulating Federal assets causes confusion for borrowers and makes administration of the loan program more complicated and costly.”..
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