Betsy DeVos Kills Joint DOE/CFPB Student Loan Fraud Program

I’m getting so sick of reporting on Betsy DeVos’s destructive decisions, but unfortunately, each week sees her advocating another ridiculous policy agenda that hurts ordinary Americans, and especially those buried in excessive student loan debt.

On Friday, September 1st, DeVos’s Department of Education announced that they’re cancelling all cooperation with the Consumer Financial Protection Bureau to monitor student loan fraud.

Which makes sense, right, because I can’t think any good reasons why we’d want our Government attempting to prevent student loan fraud.

I mean, why would we waste energy on that when we could instead turn a blind eye to the biggest financial bubble in world history and allow for profit schools, hedge fund investment bankers and massive student loan servicing companies to bilk TRILLIONS of dollars from ordinary Americans?

Isn’t that what powers our modern economy?

Betsy DeVos is NOT Looking out for You

I can’t imagine a single reason why Secretary DeVos thinks this is a good idea to kill the Education Department’s cooperation with CFPB, oh, other than the fact that she is connected to a very large student loan servicing company (through family ties) who may want to continue engaging in the very same sort of fraud that the DOE and CFPB have been attempting to prevent… but I digress.

Since Betsy DeVos is the Secretary of Education, she gets to set public policy, and apparently President Trump, who I previously thought could become the first Student Loans President (I’ve completely given up on that fantasy, by the way), is apparently on board with Mrs. DeVos’s ridiculous ideas, because he hasn’t said a single negative thing about her leadership since she took the helm.

Anyway, that’s enough about the Dear Leaders for now, let’s focus on what this partnership was, and what losing it is going to cost the average American.

What Were DOE and CFPB Doing Together?

The student loan fraud monitoring partnership between the Department of Education and the Consumer Financial Protection Bureau was established way back in 2011, reaffirmed in 2013, and was created to allow the CFPB to collect DOE consumer complaints about student loan companies and student loan servicers.

Based on the original agreement, CFPB was supposed to collect these complaints, sift through them to determine which needed to be pursued, then pass them along to the Department of Education within 10 days of receiving them.

This was supposed to streamline DOEs ability to respond to complaints, and actually start policing the evil schools, financial institutions and loan servicing companies scamming the American taxpayer.

In the beginning, CFPB kept up their part of the deal, but when DOE kept refusing to actually do anything about the complaints they were receiving (they were too busy, apparently), CFPB began pursuing the complaints themselves, and going after the for-profit schools, the lenders, and the servicers who were obviously committing fraud and all sorts of other illegal activity.

Is There Any Evidence of this Agreement Working?


If you’ve been following the student loan industry in the past several years, then you’d be familiar with the fact that the CFPB is one of the ONLY organizations actually doing anything to help people like you and me, by filing lawsuit after lawsuit against these terrible companies that care nothing about education, and only about their bottom line.

Along with the FTC, CFPB has lead the charge against fraudulent activities, filing or helping with lawsuits against some of the industry’s biggest players, including DeVry, ITT Tech, Corinthian Colleges, FedLoan, Navient, Aequitas Capital and the National Collegiate Trusts.

And these aren’t little lawsuits, but huge, massive, multi-million and sometimes even BILLION dollar attacks on the worst of the worst in the higher education industry; the people inflating the student loan debt bubble, and literally threatening our entire economy by inflating the debt bubble so high that Americans can’t afford to buy new homes, new cars, and the things that really power our economic growth (unlike low-quality, ridiculously-overpriced education programs!)

Want to see the Proof?

For details on any of the major successes the CFPB and FTC have had in recent years, be sure to check out the following pages of my site, where I go into detail about what some of the industry’s biggest companies have been accused of, what the potential penalties they might face, and what student loan forgiveness or refund benefits may look like for those impacted by their illegal behavior:

According to Betsy DeVos, What Did the CFPB Do Wrong?

It’s pretty simple really, and sounds just like the sort of thing a completely inept, useless and jealous person would accuse a successful person of doing: Secretary DeVos has accused the CFPB of getting stuff done… without asking permission beforehand!

The Education Department is now refusing to work with and share data with the CFPB simply because the CFPB stopped handing complaints back to DOE (who wasn’t doing anything with them), and pursuing them itself, taking the bad actors to task, shutting them down and prosecuting their illegal behavior!

Per DeVos’s decree, the CFPB violated their original agreement with DOE because they were attempting to address the complaints on their own, which technically, they weren’t authorized to do (per DeVos, I don’t know if that’s actually true or not).

Why I Completely Disagree with This Accusation

Personally, having followed the industry for a decade now, I feel pretty confident in my ability to read the value of each organization involved, and determine where the problems truly lie… and I would argue that the CFPB is the best possible organization to pursue these complaints because they were truly looking out for borrowers, and actually getting things done.

Compared to the DOE, who has done nothing but sit on their hands and ignore the massive problems in the student loan lending and servicing industry, CFPB accomplished some major wins in recent years.

Obviously, this struck a nerve with the Department of Education (read: Betsy DeVos), because it jeopardized the business operations of her colleagues, friends and family members, who just may have relied on corruption to pad their bottom lines…

Proof that DOE is Way out of Line

If you need proof that this whole thing is a procedural joke and that the DOE is making a huge mistake, then just take a look at their statement on why they’re severing ties with CFPB:

[DOE] “takes exception to the CFPB unilaterally expanding its oversight role to include the Department’s contracted federal loan servicers… characteristic of an overreaching and unaccountable agency… using the [Education] Department’s data to expand its jurisdiction into areas that Congress never envisioned…”

Sounds just like the sort of thing a corrupt, negligent, paranoid, control-freak, would say when someone new comes in and does a significantly better job accomplishing the assignments that were being ignored before, right?

Unfortunately, there’s nothing the Consumer Financial Protection Bureau can really do about this; they’re basically shut out from the data and details they needed to pursue consumer complaints, since it was data collected and stored by DOE, then shared with them.

Where Does This Leave Us?

It’s sad, but Republican lawmakers and many conservative business-leaders across the country have continued to criticize the CFPB for their work, claiming that CFPB is violating congressional mandates, attacking lenders and companies without following due process laws, but like I said before, CFPB has been one of the only groups that’s done anything at all in recent years to address the many rampant issues plaguing the student loans industry.

If I were in charge, I’d ask these critics to go fly a kite, while I pumped up funding to the CFPB. Oh, but I’d do all that after firing Betsy DeVos first, as she’s so obviously out of touch with the needs of ordinary Americans and so far over-head-head in this position that it’s probably the single-worst Presidential Cabinet appointment in history.

Did I mention I’ve got a Political Science background too? This is no joke… I would bet money that in 100 years, historians will STILL be talking about Trump’s decision to appoint her as being one of the worst in the history of the United States.

My Take… For What It’s Worth…

I’ve said it before, but I love a good conspiracy theory, and in DeVos’s behavior I continue to see the exact same signals that she started sending out very early in her tenure as Secretary of Education: this woman is corrupt as hell, and will stop at nothing to help pump more money into the pockets of her friends and family members.

The ONLY reason I could see Betsy DeVos making this move is because she doesn’t want her cronies… I mean friends and family members… to get exposed for running the sorts of scams they’ve been getting away with for years, lending high-cost loans to people who don’t need them, pumping out worthless higher education degrees that do nothing to help the people that pay for them, and crushing the financial futures of borrowers by intentionally screwing up their student loan servicing.

What do ACTUAL Experts Think?

I’m just a guy with a Blog, so let’s look at what some of the actual industry-experts think.

Fortunately I’m not at all alone in my analysis, as one of the industry’s most highly intelligent, well-connected expert, Persis Yu, director of the National Consumer Law Center’s student loan borrower project, had this to say about Betsy DeVos’s latest move:

“DeVos is prioritizing the interests of predatory for-profit schools, debt collectors, and troubled student loan services over the interests of student loan borrowers.”

Persis Yu wouldn’t say something like this without very good reason to do so, as it’s not generally a good idea to make enemies with the Secretary of Education, when your entire organization and employment literally rely on the industry that they control.

Why Do I Give Betsy DeVos Such a Hard Time?

Not only has Betsy DeVos ruined the CFPB partnership that’s been so fruitful in fighting back against corrupt student loan companies, but she’s also already attempted to cancel the Public Service Loan Forgiveness Program, and pause Borrower’s Defense to Repayment Benefits.

But that’s not all, because just this week, she also announced that she was appointing one of the old DeVry University officials to take charge of the Education Department’s enforcement division!

That’s the very same DeVry, by the way, who was fined $100,000,000 (ONE HUNDRED MILLION DOLLARS!) for scamming millions of Americans out of their hard-earned money via false advertising.

The same DeVry who had to be shut down forcefully because they cared so little about providing any educational value to their students.

The same DeVry who only existed to maximize profits, NOT to provide any useful education programs.

So for those of you who haven’t been following any her moves closely enough, or who have skipped to the bottom of this post, here’s the TLDR:

The United States Secretary of Education Betsy DeVos is the student loan community’s public enemy number 1.

If you have student loan debt, you should not support anything that Betsy DeVos proposes. In fact, you should do everything that you can to resist her policy objectives.

Betsy DeVos is a poison pill, and her initiatives are designed to make the student loan crisis worse for you, your friends and your family.

Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.


Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.


  1. Thomas August 16, 2018
    • Tim Marshall October 17, 2018

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