Education Secretary DeVos to Give All Student Loan Accounts to One Company; Strip Away More Protections
Education Secretary Betsy DeVos has made another sweeping change to the student loan system that consumer advocates claim favors student loan collectors over the American people repaying those loans.
The latest move from DeVos — who only weeks ago rescinded a number of student loan servicing protections put in place by the previous administration — will put all federal student loan servicing under the control of just one company starting in 2019.
There are currently nine student loan servicers handling these accounts for the federal government.
Late Friday afternoon, DeVos announced the upcoming changes via an amendment [PDF] to the contracting process, which will see the student loan servicing contract awarded to just one of the following: Navient (the servicer spun off from Sallie Mae), GreatNet, or the Pennsylvania Higher Education Assistance Agency (PHEAA).
Whichever company ultimately receives the contract will be required to build a platform to collect on and service an estimated 32 million federal direct student loans.