Student-Debt Firms Protected From State Probes Under Trump Plan
- Education Department draft memo argues need to preempt states
- Federal contractors Navient, Nelnet stand to benefit
Students pull a mock "ball & chain" representing the $1.4 trilling outstanding student debt at Washington University in St. Louis, Missouri.
Photographer: Paul J. Richards/AFP via Getty Images
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Student-loan debt collectors accused of misleading borrowers would get protection under a proposal from the Trump Administration.
The Department of Education may issue a statement that federal law prohibits state governments from regulating companies that collect student debt on the department’s behalf, according to documents reviewed by Bloomberg. The proposal, which would reverse the department’s position in 2016, could aid publicly traded companies such as Navient Corp. and Nelnet Inc., which collect monthly payments and counsel borrowers.