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Bonamici, Wild, Horn, Harder Hold Sec. DeVos Accountable for Illegal Credit Drops of Millions of Student Borrowers

May 27, 2020
Press Release

 

WASHINGTON – Today Representatives Suzanne Bonamici (OR-01), Susan Wild (PA-07), Kendra Horn (OK-05), and Josh Harder (CA-10) led a letter to Secretary of Education Betsy DeVos demanding accountability for a lack of Department oversight which led the credit scores of 4.8 million student loan borrowers to drop significantly and erroneously. 

 

Passed by Congress and signed into law in late March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act automatically suspends payments, interest, and collections on government-held federal student loans until September 30, 2020 with no adverse credit consequences. Despite this clear statutory language, federal student loans serviced by Great Lakes Educational Loan Services were not treated as suspended student loan payments in accordance with the new law, and Great Lakes borrowers experienced wrongful credit score drops.

 

“Too many families and individuals across the country are already struggling to pay their bills because of the coronavirus pandemic,” Bonamici said. “It is unacceptable that Sec. DeVos and the Department of Education are causing them even more financial distress by failing to provide adequate oversight of student loan servicers. Congress passed the CARES Act to protect student loan borrowers during this challenging time. Borrowers and the public deserve answers.”

 

“There is no excuse. The Department of Education had the full power – and an obligation to student borrowers – to ensure this did not happen,” Wild said. “Because Secretary DeVos continually refuses to provide necessary oversight, millions of student borrowers were forgotten when they most needed support. It’s the job of the Department to properly implement education law and provide the oversight necessary to do so. This is grossly irresponsible.”

 

“I fought for protections in the CARES Act to help student borrowers during this pandemic,” Horn said.“Sadly, bad actors in the student loan industry have illegally garnished wages and lowered credit scores for 4.8 million students during this national emergency. We are urging Secretary Devos to comply with the law by enforcing protections for student loan borrowers during this crisis. The public deserves answers on why the law has not been enforced and whether the Department of Education has corrected these practices.”

 

“Betsy Devos is back at it again. She’s throwing literally millions of young Americans to the wolves during the worst employment crisis since the Great Depression,” Harder said. “We explicitly protected student loan borrowers from harm in the CARES Act – but apparently Secretary DeVos would rather allow her friends in the student loan industry to ignore the law than protect regular people who are struggling.”

 

“Amid a national emergency, when millions of Americans are struggling financially, borrowers affected by this illegal practice would have had their access to credit impacted at a time when they needed it most,” wrote the lawmakers in the letter. “This is yet another demonstration of the Department’s inability to hold student loan servicers accountable…Even when it comes to the CARES Act, the Department has shown that it has struggled to follow the mandates of the law.”

 

Read the full text of the letter here.

 

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