What Devos Means for Student Loan Borrowers

Hey guys! Jeni here. If you’ve been watching the news at all lately
I’m sure you’ve seen more than you ever wanted to about proposed budget cuts for higher education
and student loan funding. Today’s video I’m going to touch very briefly
on DeVos’ proposal to eliminate the public service loan forgiveness entirely. Then I’m going to focus mainly on DeVos’ proposal
to have only one company service all federal student loans. So let’s get right into it. The first proposal in the DeVos department
of education budget for 2018 that we’re gonna talk about is to eliminate public service
loan forgiveness. This is proposal is kind of unclear whether
existing borrowers would be grandfathered in or not. We won’t talk a ton about that today I’m gonna
do a video next time which is going to focus on what you can do if you find yourself in
a situation where loan forgiveness has been eliminated. So I’m gonna try and give you the power to
navigate that situation and hopefully alleviate some of the worry you might have about this
uncertainty. Alright let’s get into the proposal to simplify
to only one company managing all federal student loans. A key thing to note is that existing contracts
with the multiple companies that currently service federal loans go into 2019 so the
proposal to have one company would not go into effect until at least 2019. Alright, so why has DeVos proposed moving
to a one payer model? The reason for this has been cited to be a
simplification of an overly complex system. Some of the pro’s would be that Devos’ administration
reports they would be better able to monitor the performance of one servicer and their
system. They have also proposed that this would lead
to superior customer service. The biggest benefit would be to the loan servicing
company in that they would likely be more profitable because there would be less red
tape. Some of the cons of this are pretty obvious
and easy to identify. If you have one company managing a 1.4 trillion
dollar industry there will be no incentive for them to accommodate borrowers. Historically we did have a single payer service
that was ACS Education Services and they serviced all federal loans. Critics of that company reported widespread
customer service failures and loan consolidation failures. Also at that point in time the Department
of Education reported that they had little leverage against that company. That is why multiple companies and contracts
were awarded to different companies to sort of increase the competition. What can you do as a borrower? The biggest thing for you to do is going to
be to call your representatives. Borrowers represent 44 million individuals
and we are a 1.4 trillion dollar industry. The numbers and the money that we owe is not
insignificant and it’s important that our voice is heard and that we’re represented. I know that I will be calling my representatives
to express my concern about these proposals and I encourage you to do the same thing. So I’d love to know what you’re thoughts are
on this. Leave them below in the comments. Lastly, the next video I will be talking about
what to do if loan forgiveness disappears. I would really love it if you would either
comment below or send me a message and let me know what your biggest fears are and what
you worry about the most if loan forgiveness were to disappear. I really hope you guys enjoyed the brief update,
let me know what you think. And as always if you like this information
you should subscribe and keep yourself in the know.

Paul Whisler

One Comment

  1. Those who don't know the history are doomed to repeat it. Thank you for your thoughtful and researched comments. I don't really have a fear about plsf going away.. I came to it late in the game with the mentality "it would be nice but I know it could away and I'm going to hedge my bets".. still hedging my bets .. thank you for encouraging me to contact my servicer.. every voice matters ✨

Leave a Reply

Your email address will not be published. Required fields are marked *