Thanks to Education Secretary Betsy DeVos, students will be required to do something they haven't had to worry about doing for years -- pay back their student loans.
On Wednesday, DeVos wrote a letter to Federal Student Aid operating officer James Runcie rolling back directives previously issued by John King, the Secretary Of Education under former president Barack Obama, designed to protect those who default on their college loan payments.
Obama administration ordered FSA to curb collection efforts
One of the directives issued under King instructed the FSA to scale back its student debt collection efforts and instead focus on assisting borrowers with debt management.
In a directive issued to Runcie by the Obama administration on July 20, 2016, titled, "Policy Direction on Federal Student Loan Servicing," the FSA was discouraged from punishing those who defaulted on their loan payments.
“The Department of Education has decided it does not need to protect student loan borrowers,” Illinois Attorney General Lisa Madigan said in a statement about the policy rollback to Bloomberg News. According to Bloomberg, the federal government spends around $800 million each year attempting to collect on approximately $1.1 trillion of student debt.
Betsy DeVos says move will limit costs to taxpayers
DeVos has made it clear that her primary concern is to reduce costs to the federal government, rather than worry about the credit scores of deadbeat borrowers.
In her letter to Runcie, DeVos said that while it's important to provide high quality customer service to borrowers, it is also important to "increase accountability," while limiting costs to taxpayers at the same time.
Not everyone is convinced, however.
Adam Minsky, an attorney who represents borrowers burdened with student debt, told NBC News that DeVos' move will only create "more frustration" for borrowers, while loan expert Heather Jarvis said that overturning the Obama-era directives sends the message that the government puts business before the borrowers."It's a signal to big businesses that the government is on your side," said Jarvis.
"You're more important to us than student loan borrowers."
Over 8.7 million students defaulted on their college loans during the Obama administration, with one default occurring roughly every 29 seconds, according to Bloomberg.
DeVos believes that rolling back Obama-era protections for those who default on student loans demonstrates "sound fiscal stewardship." She also insists that, in the long run, the rollback of Obama-era protections will improve outcomes for borrowers -- perhaps by giving them a painful lesson about personal responsibility: If you borrow money, don't be surprised when you're told that you have to pay it back.
