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GUEST EDITORIAL

Setting priorities straight

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Editor’s note: Today’s editorial originally appeared in The Columbian. Editorial content from other publications and authors is provided to give readers a sampling of regional and national opinion and does not necessarily reflect positions endorsed by the Editorial Board of The Daily News.

With the federal government abdicating its role as a watchdog for the benefit of the public, kudos are warranted for the Washington Legislature.

In March, lawmakers passed a student loan bill of rights (Senate Bill 6029), providing protection against predatory lenders. Considering that about 800,000 Washingtonians hold more than $14 billion in student loan debt, the bill is important for the financial security of many residents. Sen. Annette Cleveland, D-Vancouver, co-sponsored the measure, which was requested by Attorney General Bob Ferguson. The bill was supported by fellow Sen. Ann Rivers, R-La Center, and in the House by Republicans Liz Pike and Paul Harris, along with Democrats Monica Stonier and Sharon Wylie.

The importance of the act has grown as the Trump administration undermines protections for consumers. Mick Mulvaney, selected by President Donald Trump to oversee the Consumer Financial Protection Bureau, last week announced that the bureau’s office for students and young consumers is being folded into the arm of financial education.

While this might seem like little more than bureaucratic shuffling, critics warn that it will diminish protections and advocacy for those holding student loans. “This is a very significant change in the mission of the student office,” Christopher Peterson, a law professor at the University of Utah and former enforcement attorney for the CFPB, told The Washington Post. “It’s an incredibly clever and sneaky move.”

At the same time, Secretary of Education Betsy DeVos has derailed investigations into for-profit colleges. An investigation team that once had about a dozen members now has three, and last week staff members who had been looking into abuses by those colleges were instructed to alter their focus and investigate other matters.

From 2006 to 2016, according to the Federal Reserve, student loan balances increased 146 percent; inflation during that period totaled 19 percent. While skeptics can point out that students agreed to the terms of their loans, predatory lenders have taken advantage of the situation.

For example, Ferguson and the state of Washington are party to a lawsuit accusing Navient Corp. — formerly known as Sallie Mae — of unfair and deceptive practices. Among the accusations is that Navient made predatory loans to students at for-profit colleges that have poor records of helping students qualify for and secure employment, then negotiated deals that had borrowers essentially paying interest on the interest those loans were accruing.

Ferguson said: “Enormous student-loan debt is an issue for many Washingtonians. I will hold companies accountable when they treat borrowers unfairly.” That, rather than protecting lenders, reflects a government that is responsive to the public.

Washington’s student loan bill of rights, which takes effect June 7, requires student-loan servicers to be licensed by the state. It also establishes a student-loan advocacy office tasked with, among other things: Compiling data on complaints from borrowers; assisting borrowers in understanding their rights and responsibilities; and providing information and recommendations regarding problems related to student loans.

In other words, state law will work for the benefit of the Washingtonians. With the Trump administration working to protect corporations, the student loan bill of rights provides some timely and necessary defense against predatory lenders.

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