The National Consumer Law Center (NCLC) and the American Civil Liberties Union (ACLU) have recently filed a lawsuit against the US Department of Education. They requested the documents that showed the process of collecting student loan debt.
The Lawsuit against the Education Department
According to the Federal Reserve, in the last 8 years, the total student debt has doubled, reaching $1.3 trillion. The CFPB states that, approximately, 1 in 5 of 42 million Americans with federal student loans are in default.
The NCLC and ACLU accused the US Department of Education of violating the Freedom of Information Act. The reason, they mention, is that the department doesn’t release information about how it monitors the work of the private debt collection companies, and the whole debt collection policy.
The preliminary response provided by the Education Department showed the debt collection program wasn’t being monitored for racial disparities. According to a department official, the Office of Federal Student Aid doesn’t track race or data concerning race.
In May 2015, another public records request was filed with the Education Department. The goal was to shed light upon the tools the department used for collecting student loans from borrowers who failed to make payments. These include wage garnishments, tax refund offsets, and more.
The Education Department’s Response
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In March 2016, the Education Department provided over 1.700 pages of documents, which was a partial response to the NCLC’s and ACLU’s 20-part Freedom of Information Act request. The Education Department officials noted they had to review the Freedom of Information Act request so to see if they could provide additional information.
The ACLU’s Racial Justice Program’s staff lawyer Rachel Goodman has mentioned that the public should know how taxpayer-funded agencies implement debt collection. This will help them ensure debt collection is conducted fairly and without any discrimination.
The groups also requested that the Education Department’s manual provided to debt collection companies should be made available to the public. As the Education Department officials have mentioned, they’re discussing if they can release the document or not.
The Department of Education has also been criticized before by Senate Democrats, consumer groups, and its own inspector general. They criticized the department for the improper oversight of the student loan collection companies hired.