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  • By: Moss Bollinger
  • Published: January 30, 2018
A student loan application form with fields for personal information, financial details, and educational background- Moss Bollinger LLP

Federal Student Aid (FSA) is a governmental entity under the Department of Education that administers contracts and oversees companies that offer students loans to college students. When Obama was president, he had concerns that too many students were defaulting on their loans and the quality of service that collections agencies were providing to students. As a result, he authored three memos to FSA that required agencies to:

  • Improve outreach efforts to students at risk of defaulting on their loans;
  • Create a minimum standard of service that agencies have to provide to students; and
  • Consider the possibility that agencies who provide poor service to students are penalized for providing poor service.

That doesn’t sound too cumbersome, right? To require that collection agencies follow a minimum standard of service so that students have options before they default? After all, these agencies are more than happy to offer students ill-advised loans.

The Trump administration apparently disagreed. On April 11, 2017, Secretary of Education Betsy DeVos wrote a letter to the Chief Operating Officer of Federal Student Aid which eliminated the three rules President ObamaStudent Loans” sign, calculator, and piggy bank with graduation cap on wooden surface- Moss Bollinger LLP created to protect students. In her letter, she stated that “Our mission in the student loan servicing procurement process is to provide high quality customer service to federal loan borrowers in a cost-efficient and effective manner.” Regarding the three Obama memos, she implied that the rules were ambiguous and acted as an impediment to her plans because they created “myriad of moving deadlines, changing requirements and a lack of consistent objectives.”

Secretary DeVos’ move was not received well. This was clear when twenty-one Democratic Attorneys General from across the country penned letters to her, criticizing her decision. Many of these states have been involved in lawsuits against student loan agencies for their predatory lending and collection practices and poor services to consumers. Among the twenty-one letter writers was New York Attorney General Eric Schneiderman, who stated that “We should be looking for ways to ease the burden of student debt, not enabling the student loan servicing industry to manipulate and exploit students.” Mark Herring, Attorney General of Virginia, stated that:


“Too many students across the country graduate college saddled with thousands of dollars in student loan debt and fall victim to gross misconduct by loan servicers. These critical reforms had been put in place to protect our students and their families, and it’s downright irresponsible for the Department of Education to roll them back.”

Did you attend DeVry and take on a high student loan? Did you do take out this student loan, believing that you could pay it off with a higher paying job you got with a DeVry degree? Our law firm, Moss Bollinger, can help you determine if you have a claim. We ask for no upfront payment and only get paid when you do. Call us today at (310) 982-2291 for a free consultation or contact us online.

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