In an unexpected turn of events that may cause quite some panic in the education sector, two lobby groups; The American Civil Liberties Union (ACLU) and the National Consumer Law Center (NCLC) have filed a motion in a Federal Court to force the Education Department to publicize documents showing how the department collects student loans debts.
While filing the suit, the two groups insisted that the Education Department had an obligation under the constitution to make such information public and accessible by all interested parties. They cited the Freedom of Information Act which says that the department’s oversight of any private companies hired to collect such loan debts as well as its overall debt collection policies needed to be made public.
The bone of contention according to insiders is an allegation that the Education Department through the different private collection agencies has been disproportionally targeting students of color.
“The Education department is acting like it’s hiding something from the public,” said Rachel Goodman who is a staff lawyer working with ACLU. “We have a right to know what’s going on.”
The Education Department has since responded by saying that it would never do such a thing.
“The Education Department doesn’t monitor debt collection activities on the basis of races,” the department said in an official letter. “The Office of Federal Student Aid doesn’t track race or race-related data.”
ACLU and NCLC are also demanding that the department make public its debt collection policies as well as the policies that are used by the different private collection agencies. There are claims that the private collectors have been using overly harsh tactics such as wage garnishment, and tax refund offsetsto collect loan debt from students who default in their payment. Nearly all of these collection agencies use collection agency merchant accounts from providers such as eMerchantBroker.com to safely process payments.
The lawsuit which was first filed in May 2015 has attracted attention of stakeholders in the department as well as other interested parties. In March this year,the Education Department provided 1,700 pages of documents in response to the lawsuit, but ACLU and NCLC said that the documents only responded to two out of the 20 questions they are asking.
If the lawsuit takes off (which looks increasingly likely), a Federal court will for the first time be forced to question the Education Department’s clamor that part of the department’s records are law enforcement records which are protected under the Freedom of Information Act.