Partner Statements: Department of Education to End Contracts with Private Collection Agencies

On Friday, February 27th the U.S. Department of Education announced it would end their contracts with five private debt collection agencies. Read our partner statements below:

American Federation of Teachers

AFT’s Weingarten on DOE Cutting Ties with Student Debt Agencies

WASHINGTON— Statement from American Federation of Teachers President Randi Weingarten on the Department of Education’s announcement that it will sever ties with five student debt collection agencies. The AFT—through work with coalitions and partners like the Higher Ed, Not Debt campaign and Debt-Free Future—has been advocating for this type of action for several years.

“These student debt collection agencies—including Pioneer Credit Recovery, a subsidiary of Navient Corp., the nation’s largest student loan servicer—are known predatory actors whose profit-taking has contributed to the wage stagnation of an entire generation. Until higher education is free, collection of student debt should not be handled by for-profit firms. It should be brought back into the Department of Education, where it was for many years. This is a victory for every student who wants to climb the ladder of opportunity. Let’s face it: Most of us aren’t pole vaulters; we climb this ladder one rung at a time. These student debt collection agencies are pulling the rungs out from under our nation’s students and graduates. We’re glad the Department of Education has finally taken a first step to protect those with student debt.”

Center for Responsible Lending

CRL senior policy analyst Maura Dundon offered the following remarks:

Student loan debt is now a trillion-dollar business – and as the financing of higher education increasingly shifts to federal student loans, the Department of Education must insist on the highest consumer protection standards. This move illustrates a commitment to responsible lending practices and is a strong step to protect consumers and taxpayers.

No matter what type of debt owed, consumers have the right to be treated fairly and in accordance with the law.

We thank Undersecretary Ted Mitchell for his actions to protect student borrowers and uphold consumer protections.

Click here to read more 

Generation Progress 

Generation Progress on the Department of Education’s Termination of Student Loan Servicer Contracts

Sarah Audelo, Policy Director for Generation Progress released the following statement in response:

“We are thrilled that the Department of Education has terminated the contracts of predatory student loan collection companies. For far too long, these companies used deceptive practices targeting student loan borrowers at a time when so many were struggling with their debt.  We are glad to see the Department of Education is taking the necessary steps to respond to the calls borrowers have been making for years and is working to put students and borrowers first.​”​

Higher Ed, Not Debt

Higher Ed, Not Debt on the Department of Education’s Termination of Student Loan Servicer Contracts

Washington, D.C—Today, the Department of Education announced it would terminate its contracts with five student debt collectors, including a subsidiary of Navient Corp.

Maggie Thompson, Campaign Manager for Higher Ed, Not Debt, released the following statement in response:

“This is a huge step forward for student loan borrowers who are too often the victims of dishonest debt collection practices.  We are happy the Department of Education protected borrowers by ending the contracts of some of the most abusive debt collectors in the business. Private companies should not make excessive profits at the expense of students and their families.  We hope the Department of Education will take additional actions to hold servicers accountable in the future.”

Student Debt Crisis

Student Debt Crisis’ Statement on the Department of Education’s Announcement to End Contracts with Five Debt Collection Agencies.

“We are enthusiastic about the Department of Education’s announcement to end their contract with five private debt collection companies. These companies have for years taken advantage of student loan borrowers by using unscrupulous practices to harm borrower’s credit and financial stability.  We encourage the Department of Education to take action to complete this proposal.  In addition, we ask that the same scrutiny placed on these predatorial private debt collectors also be applied to ALL student loan servicers”  ~ Natalia Abrams, Executive Director

Young Invincibles

In response to the Department of Education’s decision to wind down contracts with five debt collectors that gave inaccurate information to student loan borrowers, Young Invincibles has issued the following statement from Policy Director Jennifer Wang:

“Young people have told us for years that private debt collectors refuse to play by the rules and use deceptive tactics that jeopardize their financial security. We commend the Department of Education’s decision to end the contracts of five debt collectors that have mistreated distressed student loan borrowers: fewer people will be faced with harmful debt collection practices that hurt their credit reports, and mislead them about their options to get out of default.”

For further background on Young Invincibles’ position, please reference this public comment that we submitted to the CFPB earlier. The comment includes stories about student borrower struggles. Thank you.



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