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Expert: ‘I’m not so sure that I trust government’ on student loans

Expert: ‘I’m not so sure that I trust government’ on student loans

serious pushback the DOE has received for the large number of outstanding student loans, one expert argued that this isn’t the way to do it.’ data-reactid=”16″>Although this seems like a potential solution to the serious pushback the DOE has received for the large number of outstanding student loans, one expert argued that this isn’t the way to do it.

On The Move. “So the best way for [her] to handle is to push it somewhere else. Now, that could be the right answer if they have the ability to do a better job, but I’m not so sure that I trust government to really be able to get this situation under control.”” data-reactid=”17″>DeVos is “looking at it and saying this is a no-win situation for [her] department,” Geltrude & Company Founder Daniel Geltrude told Yahoo Finance’s On The Move. “So the best way for [her] to handle is to push it somewhere else. Now, that could be the right answer if they have the ability to do a better job, but I’m not so sure that I trust government to really be able to get this situation under control.”

conference in Reno, Nevada, hosted by the DOE’s Federal Student Aid (FSA) — which manages the vast majority of outstanding student loans — DeVos laid out her argument to spin off that office into a new agency.’ data-reactid=”20″>Speaking earlier this week at a conference in Reno, Nevada, hosted by the DOE’s Federal Student Aid (FSA) — which manages the vast majority of outstanding student loans — DeVos laid out her argument to spin off that office into a new agency.

said. “Congress might’ve created the first financial aid program, but it set in motion an untamed beast.”” data-reactid=”21″>“Since the federal government inserted itself everywhere in student lending, everything has become more cumbersome and more confusing for everyone,” Devos said. “Congress might’ve created the first financial aid program, but it set in motion an untamed beast.”

U.S. Education Secretary Betsy DeVos speaks at the United States Conference of Mayors winter meeting in Washington, U.S. in January 2019. (Photo: REUTERS/Yuri Gripas)

To make the FSA provide better services for borrowers, and to act “like a world-class financial firm” since it is effectively “the country’s biggest consumer lender” because of its trillion-dollar portfolio, DeVos suggested making the FSA “a standalone government corporation, run by a professional, expert, and apolitical Board of Governors.” 

“Congress never set up the U.S. Department of Education to be a bank, nor did it define the Secretary of Education as the nation’s ‘top banker’,” she added. “But that’s effectively what Congress expects based on its policies.”

New York Times. ‘ data-reactid=”47″>Separating federal policy on student loans and actually managing the operations “has been a dream for 20 years, and it only works on paper,” Ben Miller, vice president for postsecondary education at the Center for American Progress, told The New York Times. 

“The truth of the matter is that FSA and [the Education Department] work best when there is close collaboration and sharing of how policy ideas would affect operations or what operational challenges might need policy solutions,” Miller added. “Making FSA separate would just make it harder to have good coordination.”

(Graphic: David Foster)

Rep. Bobby Scott (D-VA), who chairs the House Committee on Education and Labor, also dismissed the suggestion.

Aarthi is a writer for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami‘ data-reactid=”79″>Aarthi is a writer for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami

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