New interpretation to encourage state collaboration on student loan service August 9, 2021 Contact: Press office, (202) 401-1576, Press@ed.gov
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    Today, the US Department of Education UU (Department ) Published a new legal interpretation that reviews and clarifies its position on the legality of state laws and regulations that govern various aspects of the service of federal loans of students. This action will help the States to comply with the laws of rights of borrowers or other similar laws to address the problems with the service of the federal loans of the students. This change is part of the federal efforts of student aid (FSA) to strengthen the student loan program by improving the supervision and responsibility of student loan administrators to protect students, borrowers and taxpayers. The interpretation will come into effect this week, but the department is also looking for public comments about the notice during the next 30 days, so you can identify any additional change that may be necessary.

    "Helping students at university. A better priority, and effective collaboration between States and federal government is the best way to ensure that student loan borrowers obtain the best possible service", The Secretary of Education of the United States, Miguel Cardona said. "We welcome public contributions on this interpretation and we hope to improve consumer protections for student loan borrowers by clarifying the relationship between federal and state law on this subject."

    Under the leadership of the Cardona Secretary, the department is committed to using all tools to protect borrowers from federal student loans, including maintaining solid associations with state regulators. The proposed notice clarifies that, although the Federal Law makes the State Regulations previously in certain narrow areas, States can regulate student loan services in many other ways without being prevaled by the Federal Higher Education Law (HEA).

    "States have for a long time played an integral role in supervising higher education and has been on the main lines to protect student borrowers from fraud and abuse," said Massachusetts Attorney General Maura Healey "We applaud the Cardona Secretary to reject the previous interpretation that incorrectly represented the authority of States and Envalite to the bad actors. Our residents deserve a solid federal state association, and my office expects to collaborate with the Department to guarantee the responsibility of the administrator and the rights of the borrower. "

    Today's action replaces a prior notice of interpretation published in the Federal Registry on March 12, 2018. That notification stated that the state efforts of HEA widely advanced to regulate Student loan administrators and have been rejected uniformly the rejected courts. The announcement published today adopts an interpretation that is more consistent with jurisprudence on federal preference and the long-standing practice of the department.

    Here you can find the proposed interpretation notice. It will be published in the Federal Registry this week, and the public will have 30 days to send comments.

    Today's announcement is based on the prerequisive efforts of the Biden Administration to protect borrowers from student loans and renew the associations with the state and federal regulators. On May 28, 2021, the Director General of the FSA, Richard Cordray announced a revised guide to the FSA sellers, which facilitates the State Lawyers and Regulators of the State to obtain the information they need FSA and the administrators of Student loans to perform supervision.

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