Education Secretary Betsy DeVos weakened federal protections for student borrowers last year, but that’s apparently not enough. The Trump administration is diving into a lawsuit by a student lending industry group against Washington, D.C., over its efforts to protect people with student debt. Sketchy student loan companies could be barred from operating in the District of Columbia if they’re found to have fraudulent or irresponsible practices, the New York Times reports—and the Trump administration is not happy about that.
Administration lawyers are arguing essentially that the federal government should get to set the ceiling on protecting students from fraudulent lending practices. The people trying to protect students see it differently:
“When Secretary DeVos took office, we went on red alert,” said Karl A. Racine, the District of Columbia’s attorney general, whose residents have the highest debt burden, $40,000 per student borrower, in the country. “We have a responsibility, in the state attorney general’s offices, to protect our consumers. We are trying to fill the gap because the secretary is stepping away from protecting students.”
Not just stepping away from protecting students—in this case, the Trump administration is stepping in to protect lenders. According to Seth Frotman, who resigned from his job protecting student borrowers at the Consumer Financial Protection Bureau after months of seeing his efforts undercut:
“As state law enforcement officials and legislators across the political spectrum stand up for student loan borrowers who have been ripped off at every turn, Donald Trump and Betsy Devos have instead chosen to protect companies engaged in rampant illegal practices,” he added. “At stake is the financial future of millions of Americans and a trillion dollar black hole in our financial markets.”
But the administration of the man who ended up paying $25 million to settle lawsuits over his own fraudulent “university” does not care about the financial future of the kind of Americans who have to borrow money to attend college.