Protecting Student Borrowers
Is the federal government doing enough to protect people with student loans? One Virginia Congressman is seeking action on the issue.
Are for-profit colleges and student loan servicing companies bilking students and families in Virginia? Congressman Bobby Scott is worried about it, and so as chairman of the House Education and Labor Committee he’s asking the U.S. Department of Education to do something about it.
Quentin Kidd at Christopher Newport University says the Newport News Congressman is concerned about students at for-profit colleges that abruptly close their doors and defraud students. “The issue that Bobby Scott’s dealing with are these for-profit educational companies that operate satellite campuses in shopping malls all over the country charging really high tuition rates for students and then just in the dark of night they go under.”
Scott is also pressing the Department of Education to crack down on student loan servicing companies like Navient, which the Consumer Financial Protection Bureau says routinely steered borrowers into forbearance rather than help them out of debt.
Earlier this year, Seth Frotman of the Student Borrower Protection Center tired and failed to get Virginia regulators to oversee the industry. “I don’t think that’s a partisan issue," Frotman says. "I don’t think that’s a Democrat or Republican issue. I think it’s about who’s on the right side. Who is standing up for the people who have taken on student debt in their districts.”
The bill he supported would have allowed for the State Corporation Commission to regulate student-loan servicing companies. It sailed through the Senate but was stalled in the House, where it failed by one vote in a Republican-controlled House committee.