Student Loan Related

Your Student Loans May Fall In a Pile if we Do DEW

Written by Steve Rhode

It sure feels like we are living in an era of government by chaos. And while I understand that government may be bloated and reorganization may be necessary at times, it just seems with all of the uncertainty created by the current Secretary DeVos Department of Education with throwing out programs and not processing fraud claims that more chaos is not a good thing.

The current administration has thrown out the idea that the Department of Education and Department of Labor should be merged into one new entity called the Department of Education and the Workforce (DEW).

The sales pitch is “The new merged department would reduce unnecessary bureaucracy, streamline access and better integrate education and workforce programs, and allow the Administration to more effectively address the full range of issues affecting American students and workers.”

The new DEW would be responsible for K-12 education, workforce and higher education (including federal student aid programs), and enforcement of labor and civil rights laws.

The current Department of Education has been doing a fantastic job of eroding consumer protections to protect students from deceptive for-profit schools, limiting states powers to bring enforcement actions to protect student loan debtors, and stopping the forgiveness of loans.

I can only imagine what this anti-consumer approach is going to do for labor and civil rights. Look at the current operation, the Department of Education can’t even keep their student loan servicers in line and give good information to the consumers they are supposed to serve.

If there was a crystal ball and Secretary DeVos was responsible for DEW then it would not be outside the realm of possibilities to see worker rights stripped and civil rights reduced as we step in a pile of fresh DEW.

The merging of the two agencies is going to require Congressional approval and based on current performance, I think we can see how well that’s going to go.

In reading through the government proposal, I didn’t find much about protecting students from deceptive schools and poor student loan servicing. In fact, it appears to be exactly the opposite.

Here is how the new division handing higher education is described.

“The Higher Education component would better align programs that promote and expand access to postsecondary education with workforce development programs to meet the diverse needs of students and workers. This includes strengthening the capacity of colleges and universities to promote reform, innovation, and improvement in postsecondary education, while expanding access to and driving improvement in high-quality, short-term programs that provide students with a credential, certification, or license in a high-demand field. The Higher Education component would also complement Federal Student Aid’s customer-service focus and move to the Next Generation (Next Gen) Financial Services Environment, also proposed in this Volume. Next Gen would enhance operational components of Federal student aid programs, make it easier than ever to apply for financial aid from a mobile platform, and streamline the way that schools interact with student loan servicing and the repayment system.”

It looks like the emphasis will be on easier borrowing, not value for money of the education sold to students and their parents.

The new division appears to want to make borrowing money for school so easy that it can be done from your smartphone with their new “mobile platform.”

What could go wrong?

It is kind of curious that the administration says consolidation is beneficial but when it comes to defense we need another branch of our military in a new Space Force branch.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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