WASHINGTON—The National Governors Association (NGA) released the following statement on the interpretation on student borrowers and loan servicers issued from the U.S. Department of Education:
“Last week’s declaration on student loan servicing from the U.S. Department of Education seeks to preempt bipartisan state laws, regulations and ‘borrower bills of rights’ currently in place and under consideration in more than 15 states.
States have stepped up to fill the void left, we believe, by the absence of federal protections for student loan borrowers, from potential abusive practices by companies servicing student loans.
With this declaration, the department moves to block state policies protecting student borrowers by establishing a federal regulatory ceiling.
We are concerned the department is heading in a direction that runs counter to the principles of collaborative federalism governors presented to Congress last week.
Governors urge the department to collaborate with states to protect students and reconsider the scope of its notice.”
