Sacramento, California - California Attorney General Xavier Becerra issued the following statement after Education Secretary Betsy DeVos announced, through a notice of interpretation, that the federal government will now preempt state laws that target abuses by student loan servicers:
“With today’s announcement, Education Secretary Betsy DeVos is attempting to exempt private contractors that service federal student loans from complying with state law. This is suspicious, unprecedented, and most importantly, without any legal basis under federal law," said Attorney General Becerra. "It is also a direct assault on the work achieved by California, as we led the country in enacting a licensing program for student loan servicers. The California Department of Justice has been fighting tirelessly to protect our students against unscrupulous loan servicers, and we won't stop. We are prepared to defend the protections we secured for college students by making loan servicers accountable for their conduct every step of the way.”
Since taking office, Attorney General Becerra has made the protection of students against financial abuse a top priority. Among other actions, he has sued the online for-profit Ashford University and its parent company Bridgepoint Education for false advertising and illegal debt collection; announced a settlement that will provide $51 million in private student loan debt relief to Californians who attended Corinthian schools; sued the U.S. Department of Education Secretary DeVos for refusing to process debt relief claims submitted by tens of thousands of students who took out federal student loans to attend Corinthian Colleges, Inc; and twice sued the Department of Education and Secretary DeVos for unlawfully delaying key federal regulations – the Gainful Employment Rule and Borrower Defense Regulations – that would help protect students and taxpayers from misconduct by predatory for-profit schools.