Trump Administration Rolls Back Crackdown on Student Debt Collectors

The Trump administration signaled its intent to move away from the Obama-era crackdown on student debt collectors by preparing to renew the government contracts of several companies that were discontinued under the previous administration, Politico Morning Education reported.

In 2015, the U.S. Education Department sought to end the contracts of four debt collection companies that allegedly misled struggling federal student loan borrowers, making "materially inaccurate representations" to borrowers trying to get their loans out of default. Navient-owned Pioneer Credit Recovery, Enterprise Recovery System, National Recoveries, and Coast Professional challenged that decision in a lawsuit.

In an effort to dismiss the lawsuit, Trump's Education Department said in recent court documents that it plans to essentially nullify the Obama administration's 2015 decision, reported Politico. Instead, agency officials will reevaluate whether to assign new defaulted borrower accounts to the four companies. The department's prior findings that the firms misled borrowers "will not be considered" as part of that decision, the department wrote.


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