New York Attorney General Eric T. Schneiderman is leading a bipartisan coalition of 25 attorneys general, including his Connecticut counterpart George Jepsen, in calling on the U.S. Department of Education to reject efforts by student loan servicers and debt collectors to void state-level oversight of the student loan industry.
In a letter to Education Secretary Betsy DeVos, the attorneys general said their investigations of the student loan industry resulted in settlements returning millions to student borrowers. In response, the attorneys general added, the student loan industry is now trying to get De Vos’ department to pre-empt state-led investigative and enforcement efforts.
“State enforcement agencies have long been at the frontlines in protecting their citizens from fraud, deceptive conduct and unfair business practices, including by financial service companies, debt collectors and others,” the attorneys general wrote. “Indeed, such actions reflect fundamental states’ rights and fall squarely within the historic police powers reserved to the states.”
“We cannot allow student loan servicers to sidestep state law and oversight and deny students and borrowers these vital protections from student loan abuses,” Schneiderman said.
Jepsen praised the state-level oversight of the student loan industry, claiming “attorneys general and state regulators are nimble, capable, experienced and able to work together with each other and with federal partners to protect student borrowers.”
Joining Schneiderman and Jepsen are the attorneys general for California, Colorado, Delaware, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Massachusetts, Maryland, Maine, Minnesota, Montana, North Carolina, Oregon, Rhode Island, Tennessee, Texas, Virginia, Vermont, Washington and the District of Columbia.