DeVos’s Rollback of Servicing Guidance Raises Fears Among Borrowers’ Advocates

Clare McCann was quoted by the Chronicle of Higher Education regarding the impact of the Department of Education’s early actions, including the withdrawal of the memos on loan servicing and its handling of the data-retrieval tool, which do not paint a promising picture for borrowers:

"The urgency of getting the data-retrieval tool back online cannot be overstated," said Clare McCann, a senior policy analyst at New America, adding that the importance of having a long-term solution for the loan-servicing industry "is also critical to helping borrowers."

Ms. McCann, of New America, said it was troubling that Ms. DeVos did not issue new guidance to replace the Obama-era memos. She called that action "a sort of desertion of the idea that servicers should be accountable for actually helping borrowers stay on track." The potential benefits of the new servicing structure had yet to be seen, she added, but withdrawing the documents that laid the groundwork for those changes removes the opportunity for such benefits to be realized.

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"The actions that the administration has taken so far have been extremely sympathetic to industry," as opposed to the students and borrowers, she said. "That’s not to say there’s not time to do those things, but, to date, they haven’t done anything that I’ve seen."