DeVos suggests making Student Aid a ‘standalone’ entity

Dec 5, 2019 by

In a speech today, Education Secretary Betsy DeVos questions the role the U.S. Education Department should be playing in the student loan business.

U.S. Education Secretary Betsy DeVos has consistently said she’d be happy if she could work herself out of a job. Her latest target: the Federal Student Aid office, an “untamed beast” she says is in “distress.”

Loans shouldn’t be political, but they have increasingly become so, given Congress’ and past administrations’ meddling in student aid. DeVos says this constant churn is complicating the process and adding confusion for borrowers — and liability for taxpayers. She thinks her department should get out of the banking business.

In a speech Tuesday at the Federal Student Aid Training Conference in Reno, Nevada, she challenged the role the Education Department should be playing in the student loan business.

More:Sen. Paul offering bill to combat student loan debt

According to a transcript of DeVos’ speech, she posed this question: “One has to wonder: Why isn’t FSA a standalone government corporation, run by a professional, expert, and apolitical Board of Governors?”

The Obama administration greatly expanded the federal government’s role in loans by making the government a direct lender, in addition to easing repayments and broadening loan forgiveness. Yet the government has long guaranteed students loans.

The office of Federal Student Aid oversees more than $1.5 trillion in outstanding loans to 42 million borrowers, and as DeVos points out, that portfolio makes FSA one of the country’s biggest consumer lenders.

“Congress never set up the U.S. Department of Education to be a bank, nor did it define the Secretary of Education as the nation’s ‘top banker,’” DeVos said in her speech. “But that’s effectively what Congress expects based on its policies.”

Source: Jacques: DeVos suggests making Student Aid a ‘standalone’ entity

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