December 21, 2015

Bipartisan Group of Senators Urges Education Department Not to Use Unsolicited Robocalling for Student Loan Debt Collection Without Evidence of Benefits for Borrowers and Taxpayers

Full text of the letter available here (PDF)

Washington, DC - In a bipartisan letter sent to the U.S. Department of Education (ED) today, Senators Elizabeth Warren (D-Mass.), Mike Lee (R-Utah), Orrin Hatch (R-Utah), and Edward J. Markey (D-Mass.) raised concerns about the newly-authorized use of unsolicited "robocalling" to collect student loan debt. Federal law has generally protected individuals from automated, unsolicited robocalling by debt collectors and others, but this consumer protection recently was eliminated as it pertains to the collection of debts owed to or guaranteed by the federal government.

"We are concerned that this provision will subject student loan borrowers to a barrage of unsolicited calls - and possibly leave them with no refuge to stop the calls," the senators wrote. They noted that ED has offered no evidence that robocalling will help borrowers choose the right repayment plan and avoid default, or that it will help the federal student loan program by generating meaningful revenue.

"The Department has an obligation to demonstrate with data that the use of this authority will provide net benefits for both student loan borrowers and taxpayers and will not result in potentially abusive debt collection practices. In the absence of such data, the Department should not direct anyone, including third party debt collectors, to use robocalls to collect student loan debt," the letter states. The senators ask ED to explain the steps it will take to generate data on this issue, and request information about the Department's interpretation of its authority under the new law.

"The federal government should focus on giving students the tools they need to repay their debts and to avoid default - not on squeezing them even harder," Senator Warren said. "The new robocalling provision raises real concerns, and the Education Department should not use this authority without evidence that it would benefit borrowers and taxpayers."

"Our higher education system is in desperate need of reform," Senator Lee said, "but allowing debt collectors for the federal government to harass distressed borrowers is not the way to do it. Instead of doubling down on a failing student borrowing program, we should be looking for new ways to increase education competition, and bring down prices for everyone."

"The Education Department is exempting itself from important protections afforded to citizens, the protection that they will not be unnecessarily harassed by collection agencies, all without any concrete evidence that this will help reduce defaults on federal student loans. We need more clarity about whether this will actually provide a benefit, rather than cause harm, said Senator Hatch.

"Congress passed the Telephone Consumer Protection Act to ensure consumers would not be subject to intrusive and unsolicited calls on their mobile phones. Despite the overwhelming popularity of this law, Congress recently passed a provision that removes a key measure protecting students from unwanted robocalls and texts. We need the Department of Education to ensure that cell phones don't start ringing with intrusive and aggressive robocalls until strong regulations protecting students are put in place," Senator Markey said.

Read a PDF copy of the letter here.