Twenty-one state attorneys general say the Education Department is refusing to release student loan information needed to protect residents from abusive student loan servicing.
Maryland Attorney General Brian E. Frosh joined 20 other state attorneys in urging the U.S. Education Department to provide student loan data needed to enforce consumer protection laws.
“Federal loans are federal assets and therefore must be controlled and regulated by the federal government,” Hill said. The attorneys general say the Education Department never formally provided a reason for no longer disclosing the data or consulted with the affected state and federal agencies. The attorneys general first raised the issue with the department in July, but say their concerns were ignored. Halting the flow of information to state authorities impedes law enforcement from “protecting the students the department exists to serve,” the letter said.
“Congress also gave to the department the authority to contract with and supervise its student loan servicers and made them responsible to the department,” Hill said. “A piecemeal, state-by-state approach to regulating federal assets causes confusion for borrowers, makes administration of the loan program more complicated and costly, and thwarts Congress’ goals that the program be administered at the federal level.
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