WASHINGTON — In a testy exchange Tuesday, Representative Rosa DeLauro sharply criticized Education Secretary Betsy DeVos over her decision to pre-empt states from any oversight of private companies that service federal college loans.
“These companies have a record of predatory practices — of abuses. State-led investigations have resulted in hundreds of millions in settlements on behalf of students,” DeLauro told DeVos. “Despite your statements, all morning, about supporting state rights, what your office has done is issue a declaration to pre-empt state regulation on companies that collect student loans.”
DeVos defended the decision, claiming that state oversight and regulation of a federal program was not necessary as federal oversight would suffice. She appeared Tuesday at a hearing on her department’s budget held by the Appropriations Subcommittee that oversees education spending. DeLauro is the ranking Democrat on the panel.
“Federal student loans is a federal program that has appropriate federal oversight and that is our argument,” DeVos said.
“You are pre-empting state rights here,” DeLauro said.
“What we are doing is ensuring that students continue being protected through the federal program that Congress created,” DeVos responded.
DeVos said the motivation was “to not layer another layer of bureaucracy” on the federal student loan program.
In her opening remarks, DeLauro had noted that Connecticut was the first state in the nation to enact protections for individuals holding student loan debt, a reference to the Student Loan Bill of Rights enacted into law in 2015 that established an Office of Student Loan Ombudsman to regulate student loan servicers and educate students and their parents through the loan process.
A 2013 study had shown Connecticut graduates hold the sixth-highest debt-load in the nation, with an average of $30,191 owed at graduation. DeLauro said Connecticut “stepped up” because of “predatory practices” within the student loan industry. She cited, as an example, that some disabled veterans found their credit scores ruined as a result of requesting loan discharges because of their “total and permanent disability.”
DeLauro also held up letters from the National Governors Association and a bipartisan group of state attorneys general who urged DeVos against pre-empting states from oversight and regulation of loan servicers.
“This sounds to me like you are standing up for debt collectors over injured military veterans. I hope that you can reassure us that this is not the case,” DeLauro said.
DeLauro also criticized DeVos over a broad swath of issues including President Donald Trump’s proposal to increase the number of armed security personnel and armed teachers in schools in response to the high school shooting last month in Parkland, Florida. DeLauro called it a dangerous policy — noting a recent incident in which a teacher accidentally discharged a weapon in school. Instead, she said every school should have a counselor but Trump’s budget would eliminate federal funds for school counselors.
She also complained about steering federal dollars to private schools through vouchers, eliminating after-school program funds, cutting early childhood education funding, and DeVos’ failure to date to visit an under-performing school.
“I was disturbed by your appearance on 60 Minutes earlier this month where you admitted you haven’t visited underperforming schools and said maybe you should visit them. Maybe? I’m perplexed by that answer because it sounds to me like you are turning your back on these schools,” DeLauro said.
