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Here’s how the midterm-election results could affect student-loan borrowers – Ladies Want More
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Here’s how the midterm-election results could affect student-loan borrowers

With no blue wave or red sweep, the implications of Tuesday night’s midterm elections for the national political landscape remain more muddled than partisans would like. What is more clear — the ways the results could impact student-loan borrowers.

As the number of borrowers with student loans and the level of debt has increased over the past several years, politicians have responded by increasingly campaigning on proposals to make college more affordable and ease the burden of loans on borrowers. In 2016, student loans and college affordability featured more prominently than in any presidential election in history. This year, we saw more candidates talking openly about their own student debt.

Now, as the winners prepare to take office, advocates are hopeful student-loan borrowers will see results. And they’ll be watching to make sure. “Overall, things are looking really good,” said Maggie Thompson, the executive director of Generation Progress, the youth advocacy arm of the Center for American Progress, a left-leaning think tank. She said results at both the federal and state level offer opportunity for changes that could make life easier for student-loan borrowers.

Here are a few ways the midterm results could affect student-loan borrowers:

Increased oversight of the Department of Education

With Democrats taking control of the House of Representatives, the leadership of the committee that oversees higher education and student-loan policy will shift too. That means Democrats now have the authority — backed by the power to subpoena — to question Secretary of Education Betsy DeVos about her approach to the student loan and education industries.

The opportunity for increased oversight allows lawmakers to shed light on “the extent to which the Department of Education is really out there to protect students,” said Daniel Zibel, the vice president of the National Student Legal Defense Network, a litigation and advocacy organization working on student-loan issues.

Over the past two years, borrower advocacy organizations like Zibel’s have raised questions and even filed litigation surrounding the Trump administration’s approach to student-loan issues. DeVos’s Department of Education has worked to re-write rules aimed at cracking down on poor performing for-profit colleges and at making borrowers whole when they’ve been scammed. The agency is also working to protect student-loan companies from state laws meant to guarantee consumer protections for student loan borrowers.

These are some of the issues Zibel’s organization is hoping Democrats will use their power to ask DeVos and other agency officials questions about. They’re also hoping lawmakers use their authority to get a better understanding of how applications for student loan relief — both for borrowers who have been defrauded and for borrowers hoping to have their loans discharged under Public Service Loan Forgiveness — are being processed.

Possibility of agenda-setting student-loan legislation

The change in leadership in the House may also present opportunities for members of both parties and bodies of Congress to come together and pass agenda-setting student-loan legislation, said James Kvaal, the president of the Institute for College Access and Success, an organization that advocates for equity in higher education.

Lawmakers have been eyeing re-authorization of the Higher Education Act, the statute that governs higher education and student-loan policy, for the past several years, but a lack of bipartisan agreement has stood in the way. With Democratic leadership in the House and Republican leadership in the Senate, the idea that lawmakers will successfully push through an HEA re-authorization may seem counter intuitive, Kvaal said, but historically when these types of bills have passed there has been divided control of government.

“Sometimes a change in control creates new possibilities,” he said.

Leaders of both parties seem to favor ideas like simplifying student loans and improving access to data, Kvaal said. Still, they’re pretty far apart on many of the particulars of student-loan policy. Last year, the Democratic and Republican members of the House committee on Education and the Workforce released separate and diverging proposals for HEA re-authorization. A change in leadership in the House may encourage Senate Democrats to move forward with HEA re-authorization knowing that Democrats in the House “will have their back,” Kvaal said.

State level regulations on student-loan companies

While it’s still unclear how successful federal lawmakers will be at working together to pass major student-loan related legislation, changes in state-level leadership means that there’s still a good chance the midterm results will shift the landscape for student-loan borrowers.

Advocates will be watching states like New York, Colorado and Maine, where Democrats now have control of the legislature and governor’s office to see if they’ll use their power to more tightly regulate student-loan companies. They’re also hopeful new attorneys general in states like Michigan and Nevada will use their role as enforcers of consumer regulations to help protect consumers, Thompson said.

“There are some huge opportunities at the state level,” she said.

Over the past few years, many state lawmakers have been moving towards requiring student-loan servicers to have licenses to operate in their state. In some cases, those efforts have failed amid student-loan industry lobbying. And even where the laws are in place, some states are facing litigation over the measures. DeVos has also indicated she’d like to shield student-loan companies from these laws, adding another obstacle to state lawmakers’ efforts.

But the “real sea change” in some state legislatures could change all that, said Whitney Barkley-Denney, senior policy counsel at the Center for Responsible Lending, a consumer advocacy group. These new leaders “will be more likely to accept the oversight role of states when it comes to both things like student loan servicing and for-profit colleges,” she said.

Fresh leadership at the state level also increases the likelihood that some states will do more to make college affordable, Barkley-Denney said. Those measures could include reinvesting in public higher education institutions or even taking steps to make college free. “There’s just a menu of things, a plethora of things that states could do,” she said.

Boosting the ranks of student-loan borrowers in government

With more women, people of color and younger candidates taking office at all levels of government — all groups disproportionately affected by student debt — advocates are hopeful their personal experience will help shift lawmakers’ approach and attention when it comes to student-loan policy. ­­Just a few of the new members of Congress with student loans: Abby Finkenauer of Iowa, Sharice Davids of Kansas, Ilhan Omar of Minnesota, Rashida Tlaib of Michigan and, perhaps most famously, Alexandria Ocasio-Cortez of New York. They are all Democrats and members-elect of the House of Representatives.

“There is still a contingent of folks out there who think ‘well you can pay your way through college, that’s what I did,’” Barkley-Denney said. But a combination of state disinvestment in higher education, rising tuition and stagnant wages means that by and large that’s no longer possible.

“Having a younger generation who has been through what college looks like now and what college affordability looks like now can only help in understanding how this crisis was created and what it really looks like,” Barkley-Denney said.

Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.

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