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Department of Education Acting to Remove State Borrower Protections


February 27, 2018

Contact: Sarah Schultz,, 202.734.6510

Department of Education Acting to Remove State Borrower Protections

[Washington]-According to recent news reports, the Department of Education is preparing to issue memos that will claim that any state-level protections for federal student loan borrowers are preempted by federal law. This would have the effect of nullifying several states’ consumer protections designed to ensure that borrowers in their state are treated fairly by student loan servicers and debt collectors. Illinois just passed the Student Loan Servicing Rights Act last year, and this particular law would be one of the laws struck down should the Department’s position be validated by a court of law.

“It’s disappointing, but not surprising,” said Erin Steva, Young Invincibles’ Midwest Director. “The Department of Education under Secretary DeVos has routinely shaped policy to benefit institutions and businesses that profit off of students and borrowers. This is just another step to remove consumer protections, whether it be the illegal suspension and ongoing erosion, of the Gainful Employment rule or the Borrower Defense rule or removing state protections that prevent students and borrowers from being ripped off. Illinois became a leader in borrower protections last year after passing the Student Loan Servicing Rights Act, and now the Department of Education may reverse this to the detriment of students in our state. This bill provides critical protections that prevent borrowers from being deceived or ignored by requiring servicers provide accurate billing information and notify borrowers of their loan repayment options.  We will continue to oppose these decisions and fight on behalf of students and borrowers.”