CBA Statement on DeVos Federal Loan Proposal

December 3, 2019
Nick Simpson

 

CBA Statement on DeVos Federal Loan Proposal

 

“The fact the Department of Education is the nation’s fifth largest bank speaks volumes to America’s federal student loan crisis.”

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“Congress and the Department of Education need to work together on real solutions – not temporary patches – to fundamentally reform and improve the federal loan system.”

 

WASHINGTON – Consumer Bankers Association President and CEO Richard Hunt issued the following statement regarding Secretary of Education Betsy DeVos’s plan to divest the Office of Federal Student Aid from the Department of Education:

 

“The fact the Department of Education is the nation’s fifth largest bank speaks volumes to America’s federal student loan crisis. Federal loans, with their double-digit delinquency rate, are not serving college students and their parents well.

 

“Secretary DeVos is right something must be done. There are steps she can take without Congressional approval to get the ball rolling, like requiring federal loan disclosures to be as transparent as those given by banks.

 

“Additionally, Congress and the Department of Education need to work together on real solutions – not temporary patches – to fundamentally reform and improve the federal loan system. Placing responsible limits on federal PLUS loans to prevent borrowers from accumulated mountains of debt which, in many cases, can never be repaid must be part of the conversation. Only by turning off the spigot of virtually unlimited federal funds can market forces become part of the conversation about reining in tuition costs.”

 

NOTE: CBA conducted a poll of 1,000 registered voters this year gauging Americans’ attitudes about student loans and student debt. Nearly 85 percent support placing responsible caps on federal and the poll also found strong support for student loans carrying clear, personalized, plain-language disclosures about the loan’s total costs. Similar disclosures are already provided by private student lenders but do not exist for federal student loans.

 

More information on CBA’s work to reform higher education lending is available here.

 

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About the Consumer Bankers Association:

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.