Attorney General James Calls on Education Secretary to Further Tackle Student Loan Crisis
New York – New York Attorney General Letitia James, as part of a coalition of 23 attorneys general from across the country, took action today to address the country’s current student loan crisis. In one letter to the secretary of education Dr. Miguel CardonaAttorney General James and the coalition are calling for further reforms to make the student loan payment process easier, as well as to prevent student borrowers from paying off debts at for-profit and now-defunct colleges. Since taking office in 2019, Attorney General James has returned more than $ 15.5 million to student loan borrowers.
“With over $ 1.7 trillion in student debt owed by students across the country, now is the time for us to take bold action to end this crisis and provide our students with the tools they need. to move forward, ”said Attorney General James. “We need to make access to higher education more accessible and that starts with affordability. Imagine what could be achieved without the heavy burden of student debt. I encourage the Biden-Harris administration to keep all options on the table, including loan cancellation. “
In their letter, the coalition of attorneys general urged Secretary Cardona to consider several policy measures that could help student borrowers, including:
- Continue the policy of suspending student loan payments and waiving interest for as long as necessary to support distressed borrowers;
- Pursue the policy of suspending involuntary collection activities, as well as authorizing suspended payments to count both in the utility loan forgiveness program and in the income-based repayment plan (IDR) release;
- Enact reforms so that student loan borrowers can access and stay in the IDR plans to which they are entitled – allowing borrowers to have more affordable monthly payments, avoid the serious consequences of default and obtain the cancellation of their loan if necessary; and
- Enforcement of the higher education law’s paid employment requirement, which would protect borrowers from for-profit programs that do not prepare students for a career.
Today’s letter applauded the education ministry’s actions just yesterday to extend pandemic protections to private loans. Attorneys General also welcomed President Joseph Biden’s pledge to consider using the executive branch to write off student debt, saying, “… we urge that any debt write-off apply to all federal loans. – including federal family education loans and Perkins loans which are not owned by the Department … For many students with debt, the current system is very complex and difficult to manage. This is an unnecessary source of great anxiety and is clearly unfair. We can and must do better. “
Today’s letter is the latest move by Attorney General James to support student borrowers. In July 2020, Attorney General James and a multi-state coalition have sued the Trump administration’s US Department of Education and former Education Secretary Betsy DeVos to block their efforts to repeal critical protections for student borrowers who have been misled or defrauded by predatory for-profit schools..
In addition, in June 2020, Attorney General James has taken legal action to prevent the Department of Education and Secretary DeVos from repealing ‘paid jobs’ rule, which provides essential protections for students considering enrolling in for-profit colleges and vocational schools that promise students “paid employment in a recognized profession” after graduation.
In January 2019, Attorney General James and the New York State Department of Financial Services have secured a $ 9 million deal with a federal student loan manager, ACS Education Services (currently known as Conduent Education Services), after an investigation found that the company had diverted borrowers from income-based repayment plans to more expensive options.
Finally, Attorney General James helped negotiate two multi-state agreements with loan companies – CU Connect CUSO student in June 2019 and PICS in September 2020 – which attacked the students of the ITT Technical Institute by tricking them into taking out private student loans. These deals have relieved the debt of $ 7.5 million to nearly 900 ITT students in New York.
Attorneys General of California, Colorado, Connecticut, Delaware, Hawaii, Iowa, Illinois, Massachusetts, Maryland, Maine, Minnesota, North Carolina, New Jersey , Nevada, New Mexico, Oregon join Attorney General James in sending today’s letter to Secretary Cardona. , Pennsylvania, Virginia, Vermont, Washington, Wisconsin and the District of Columbia.