We knew it was going to be bad. Just how bad we still don't know. Education Secretary Betsy DeVos has been slow getting off the ground, but she just did something that will have a huge impact on millions of Americans who still have student loan debt from their college years or will need to take in on in the future. We're reprinting this article by Jack Moore, published in GQ on April 12. Emphasis is our own.
During the Obama administration, the number of people defaulting on their student loans grew astronomically. According to Bloomberg, the number was somewhere in the vicinity of 8.7 million people, which roughly translates to someone defaulting every 29 seconds. So what did President Obama do? He put in place policy memos that directed the Federal Student Aid Office to shift its focus, spend less time on debt collection, and help borrowers find ways to manage debt with repayment plans and other techniques.
That sounds great, right? The government treating the people it lent money to as people and not accounts to be paid. Who could have a problem with that? Why, Betsy DeVos, of course. Everyone's favorite underqualified secretary of education wants no part of such things. In order to cut costs, DeVos has decided that she's going to throw Obama's plans out the window and, as is becoming a theme with this administration, she has no replacement plan ready to go.
"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. I write today to reiterate the importance of the task ahead and reaffirm the Department’s commitment to achieving its mission.
"Unfortunately, this process has been subjected to a myriad of moving deadlines, changing requirements and a lack of consistent objectives. We now find ourselves in a situation where we must promptly address not only these shortcomings but also any other issues that may impede our ability to ensure borrowers do not experience deficiencies in service.
The key word there is "cost-efficient." The rest is doublespeak. You can't just say the Obama plan didn't have "consistent objectives." It did. If you read the two memos, there is a very clear objective. Namely, "simplifying the repayment process, better protecting borrowers, and facilitating our oversight of servicing contractors." That's pretty damn consistent. The shorter version? Obama's plan was built to make repaying loans easier.
What do people who work in this area think of this decision?
DeVos’s move “will certainly increase the likelihood of default,” said David Bergeron, a senior fellow at the Center for American Progress, a Washington think tank with close ties to Democrats. Bergeron worked under Democratic and Republican administrations over more than 30 years at the Education Department. He retired as the head of postsecondary education.
Sadly, this is what you expect from DeVos, who had this exchange with Elizabeth Warren during her confirmation hearing:
WARREN: Mrs. DeVos, do you have any experience in running a bank?
BETSY DEVOS: Senator, I do not.
WARREN: Have you ever managed or overseen a trillion dollar loan program.
DEVOS: I have not.
WARREN: How about a billion dollar loan program?
DEVOS: I have not.
WARREN: Okay. So no experience managing a program like this. How about participating in one?
I think it is important for the person who is in charge of our financial aid programs to understand what it is like for students and their families who are struggling to pay for college. Mrs. DeVos, have you ever taken out a student loan from the federal government to help pay for college?
DEVOS: I have not.
WARREN: Have any of your children had to borrow money in order to go to college?
DEVOS: They have been fortunate not to.
WARREN: Have you had any personal experience with a Pell Grant?
DEVOS: Not personal experience, but certainly friends and students with whom I have worked.
WARREN: So you have no personal experience with college financial aid or management of higher education.
I'm not positive that, before she had this job, Betsy DeVos knew what a loan was.