UNITED STATES
Sources in the US Department of Education are claiming the Department collaborated with the Administration of President, Donald Trump to block an inquiry into high rejection rates among applicants for the Public Service Student Loans Forgiveness Program.
Media reports said the Consumer Financial Protection Bureau (CFPB) was denied information from companies that operated student loan call centres, effectively ending its efforts to investigate.
The Education Department has reported that about only 1 per cent of applicants to the program were accepted.
Several sources familiar with the Bureau’s investigation efforts told National Public Radio that the Department’s interference directly contributed to the CFPB failing to adequately address issues with the loan forgiveness program.
A former lawyer with the CFPB, Christopher Peterson (pictured) said it was “100 per cent clear” that the Public Service Student Loan Forgiveness Program was broken and needed to be fixed.
“We have teams of seasoned, trained accountants and lawyers whose job and expertise is fixing exactly that type of thing, but instead of sending them in, we’re just leaving them on the sidelines and the problem’s not getting solved,” Mr Peterson said.
Press Secretary for the Education Department, Angela Morabito said the Agency was committed to a partnership with the CFPB to root out illegal behaviour.
“In order to protect student privacy, we ask that any requests for information from servicers be sent directly to the Department,” Ms Morabito said.
“We are currently working closely with the CFPB on protecting student borrowers from third-party debt relief fraud.”
The CFPB was established in the wake of the recession of 2007–08 to regulate financial service companies, including student loan servicers.
It was designed to be an apolitical and independent oversight Agency, fulfilling its mission to protect consumers and borrowers regardless of the prevailing politics of either the White House or the Congress.
Washington, DC, 18 October 2019
