It was with much trepidation that people watched the appointment of Betsy DeVos unfold back in February. Though the Secretary of Education is one of the least powerful cabinet positions, her appointment struck fear and anger within the education community. And for very good reason; with no experience managing public schools or student loans, DeVos does not have the experience to manage the academic system of an entire country.
DeVos is most known in Michigan, her home state, for advocating school choice; school choice is an idea that seems good at the core, but the way DeVos structures it leaves vulnerable students even more vulnerable. This is seen best in Detroit, where DeVos’s plan was implemented, as the charter schools did not have any regulation in terms of spending the government money they were allocated. DeVos told the Washington Post that “Actually I believe that there’s a lot that has gone right in Detroit and in Michigan with regard to charter schools, and the notion that there hasn’t been accountability is just wrong,” even though these schools regularly underperform. Because of the failure of many public and charter schools, it’s no wonder so many students and teachers were wary about DeVos becoming the Secretary of Education.
It’s no surprise, then, when DeVos was creating a staff for her department that some of the appointments were questionable. The most recent of these was the appointment of
Wayne A. Johnson at the head of the Office of Federal Student Aid. This is problematic for one main reason: Johnson is currently the CEO of the Reunion Financial Services Corporation, a company specializing in private student loans.
This isn’t the only thing student loan borrowers should be worried about, however. DeVos has made a number moves that illustrates her lack of understanding about what it actually means to borrow money in order to afford school—especially given that she didn’t have to take out student loans for her degree. At the end of May, DeVos announced her plan to use one company to handle all federal student loans, illustrating her inexperience in managing student financial aid. By consolidating all providers into one, the process of student loans is likely to become even more frustrating. This might ultimately cause students to pay even more for their loans, making the repayment period even longer.
In the past year, complaints about student loans from borrowers have increased drastically; they often cite things like lost paperwork, unexpected delays, and poor customer service. In an industry that is consistently criticized for its lack of accountability to students, consolidating all that power into one company is risky: where currently, student loan servicers don’t have much incentive to help get loan borrowers out of default, one can imagine that their lack of incentive would be made even worse under a single company. However, the Trump administration argues that consolidating all the federal student loans into one company will help the government save money, but doing so could be at the cost of the millions of student loan borrowers in the United States.
By consolidating all providers into one, the process of student loans is likely to become even more frustrating. This might ultimately cause students to pay even more for their loans, making the repayment period even longer.
While the Obama administration was also working on ways to consolidate student loan providers, DeVos had halted this process last spring, eventually releasing her own one provider plan. The main difference in the two plans is what DeVos plans to cut, specifically eliminating subsidized loans for low-income students and ending the Public Service Loan Forgiveness Program. The elimination of these two things is troublesome for student loan borrowers, especially those that these programs directly benefit.
Additionally, DeVos is planning on changing the income-based repayment program—while it shortens the time that students will be repaying their loans, it comes at a much higher cost. As DeVos manages the trillion-dollar student loan industry, one thing is clear: she doesn’t have the student loan borrowers in mind. DeVos’s only goal seems to be to put as much money back into the government budget as possible.
With the direction that DeVos is taking in terms of student loans, it’s important to protect yourself in a time where the future seems very shaky. There are a few things you can do to make the process smoother for yourself and make sure that you avoid a sticky situation.
First, always make sure to keep records of any communication with loan companies or the Department of Education, and get it in writing whenever possible. Then, if there’s ever a dispute, you have proof to back it up.
Second, whenever dealing with any information pertaining to student loans, talk to the Department of Education directly whenever possible. This eliminates the middle man, as this will help ensure that the problem is taken care of more quickly.
Third, research and review your options yourself. By being aware of what’s out there, you can make sure that your plan or repayment process is the best possible one for your particular situation. Studentloans.gov is the best place to get any information you need regarding your loans, as they will also provide your student loan history and give you the information to contact the Department of Education directly.
Being diligent and staying on top of your student loans is the best option for ensuring that you’re protected in an era where the Department of Education is running an industry that she knows nothing about. Student loans are daunting in and of themselves, and DeVos is adding a layer of difficulty that makes the future unpredictable and shaky.
Though DeVos’s actions in terms of student loans aren’t promising for the future, there is a sliver of hope—maybe this will show how broken the student loan system in the United States, and eventually a better plan can be created.
(Photo of Betsy DeVos possible cursing out a young child. Courtesy of US Department of Education.)