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Published: Sun, May 21, 2017
Economy | By Melissa Porter

USA to give contract for student loan servicing to one company

USA to give contract for student loan servicing to one company

Under the Trump budget plan, the cuts would include mental health support, advanced coursework, arts education, and after-school programs, according to the Washington Post, which obtained a near-final version of budget documents.

Additionally, in February Larsen teamed up with Republican Rep. Luke Messer (IN-06) to introduce legislation aimed at reducing the financial burden on veterans seeking higher education by making application fees eligible under the Post 9/11 GI Bill. Throughout the a year ago of the Obama administration, officials proposed revamping the student loan servicing system by creating a contract that would require servicers to work closely with borrowers at risk of default and send borrowers literature developed by the Consumer Financial Protection and Department of Education that informed borrowers of their rights, among other provisions. In 2015 former President Barack Obama proposed limiting the federal forgiveness loan amount to $57,500, but under the Trump-DeVos proposed budget the program would be cut entirely. It would slash $1.2 billion in funding for after-school programs that serve 1.6 million children, the majority of whom are low-income.

In K-12 education funding, 22 programs would be eliminated. And Trump and Education Secretary Betsy DeVos haven't launched any efforts thus far to ensure the quality of charter schools, which would get 50% more federal aid than before under the draft budget. Education Department spokeswoman Liz Hill also told the outlet that figures are preliminary until next week but that the proposal guards funding for special education, manages taxpayer dollars sensibly, and showcases the department's commitment to school choice for poorer students. The administration also wants to devote $1 billion of Title I money to a new grant program called Furthering Options for Children to Unlock Success, but only for districts that allow kids to-you guessed it-choose their school.

Nelnet reported earlier this month that it had received notice from the Education Department that the process for that bid would be changing and said it was, "awaiting announcement from the new administration on the next steps in the procurement process".

Why else propose slashing the Federal Work Study Program, a venerable source of financial aid and work experience, by nearly half?

Those, and other requirements, are missing from the updated solicitation published by the DeVos administration Friday, which is troubling, said Colleen Campbell, the associate director of postsecondary education at the Center for American Progress, a left-leaning think tank.

As the Post notes, the proposal could actually benefit many undergrads. As with many other important subjects, President Trump doesn't seem to know what he is talking about. But mot only is it ethically problematic for our government to treat college students like cash cows; it's also just another way to ensure more money for education is directed to the vast financial empire that profits off servicing those loans, refinancing the debt and collecting on loans that go into default. The new education secretary, she said, "lacks that knowledge".

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