ACLU Sues USA for|Info on Student Debt

     BOSTON (CN) – The ACLU sued the U.S. Department of Education this week for information about the racial impacts of its student loan collection policies and the private companies that collect the debts.
     Joined by the National Consumer Law Center, the ACLU’s federal lawsuit claims the Department of Education is way overdue in responding to a 10-month-old Freedom of Information Act request for information about its monitoring of private collection agencies.
     The lawsuit cites several studies that found racial disparities in student debt: for instance, that black and Latino adults are almost twice as likely as white adults to hold student debt, and that 15 years after graduation, black students are five times as likely to default on such loans than white adults, while Latino adults are twice as likely.
     Studies also have found the disproportionate default rates linked to the fact that minority students are more likely to have attended a profit-seeking college.
     Demos, a public policy advocacy and research group, released a report last year called “ The Debt Divide ,” detailing how student loan debt is disproportionately accrued by race.
     “For-profit institutions also enroll disproportionate numbers of black and Latino students. In fact, Black and Latino students make up fewer than one-third (29 percent) of all college students, but nearly half (45 percent) of all private for-profit students,” the report’s author Mark Huelsman wrote.
     The ACLU then sent the Department of Education a FOIA request for information on its policies and practices for monitoring the racial impacts of its collections.
     In its March 30 lawsuit, the ACLU says the Department of Education “has repeatedly failed to protect borrowers when PCAs [private collections agencies] seek to collect defaulted debts. PCAs’ compliance with the law and their treatment of borrowers has been deeply flawed, as has ED’s [Education Department’s] supervision of PCAs.
     “In 2014, both the Government Accountability Office and ED’s own Office of the Inspector General (OIG) concluded that ED’s oversight of the PCAs was insufficient.”
     The ACLU claims, among other things, that the Department of Education does not penalize private collection agencies for poor scores on their service quality.
     “According to the PCAs’ contracts with ED, ED can add or subtract points from this score for ‘service quality,’ but the OIG report revealed that ED does not use this category to calculate scores,” the complaint states. “This omission persists even where ED has received multiple similar complaints about a PCA on an issue that it considers to be a concern; although the PCA contract requires a point deduction in these circumstances, ED had never deducted points from a PCA’s score after instructing it to stop the concerning activity.”
     The Department of Education told Courthouse News it has not decided whether to release the information.
     “We are reviewing the FOIA request sent by these organizations to determine if more information can be provided on this topic,” spokeswoman Dorie Nolt said in a statement. “The singular goal of our student loan program is to help all students get a degree that sets them up for success, and we take the treatment of our borrowers – particularly historically underserved students – very seriously.”
     The ACLU wants to see the records, and it wants attorney fees.
     Its lead counsel is Stuart Rossman with the National Consumer Law Center in Boston.

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