Senator Warren Statement On DeVos' Reversal Of Single Loan Servicer Plan
Aug 04, 2017 05:46AM
By Theresa Gilman
Senator Elizabeth Warren
Note: the following information was provided by the office of U.S. Senator
Washington, DC - United States Senator Elizabeth Warren (D-Mass.) released a statement Tuesday following Secretary Betsy DeVos' reversal of the Education Department's plan to award all federal student loans to a single student loan servicer. The Education Department's announcement followed yesterday's introduction of the bipartisanStudent Loan Servicer Performance Accountability Act, which would have forced the Department to cancel their single servicer plan.
"Secretary DeVos' plan to hand a trillion-dollar federal loan portfolio over to just one private company would have created a ‘too big to fail' federal contractor, eliminated market competition, and ultimately harmed borrowers. That's why I worked with Senators Blunt, Shaheen, and Lankford on bipartisan legislation to prevent this terrible plan from going into effect. I'm glad the Education Department is changing course, but it will be important to continue watching the Department to evaluate whether its decisions are good for the millions of struggling federal student loan borrowers. Congress should pass our bipartisan legislation to ensure that the Department never heads in this direction again,"Senator Warren said.
The current federal student loan servicing contracts are set to expire in 2019, and the Education Department has been administering a competition for the next round of contracts since last spring. Senator Warren was concerned that the Department's recently announced single servicer plan would dramatically exacerbate the anti-competition problem at the Federal Student Aid office. Senator Warren had previously called for more competition in Direct Loan servicing, including sending a letter with Sen. Murray on June 10 to the Department, and raising concerns that the Department's plan would harm students by creating an unmanageable and unaccountable monopoly in the federal student loan servicing market.