DeVos move on student loans raises question

Americans who default on some of their federal student loans are likely to pay more after Education Secretary Betsy DeVos reversed an Obama administration directive limiting some fees. But it turns out the Trump administration decision has some beneficiaries — including the father of a key DeVos lieutenant who just quit.

DeVos’ decision, announced last week in a memorandum to the student loan industry, allows companies known as guaranty agencies to charge distressed student debtors fees equivalent to 16 percent of their total balance, even when borrowers agree within 60 days to make good on their bad debt.

The reversal is almost certain to hand United Student Aid Funds, the nation’s largest guaranty agency, a victory in its twoyear legal battle against her department. The fees could translate into an additional $15 million in annual revenue for the company, filings in a related lawsuit suggest. Until Jan. 1, United Student Aid Funds was led by Bill Hansen, who served as deputy secretary of education under President George W. Bush. His son, Taylor Hansen, a former for-profit college lobbyist, was until three days ago one of the few DeVos advisers with professional experience in higher education.

The younger Hansen resigned from the Education Department on Friday, department spokesman Jim Bradshaw said. Hansen couldn’t be reached for comment on his departure.

Ben Miller, senior director for postsecondary education at the Center for American Progress, a critic of the new Republican administration, said on Twitter the rule change was “an early Father’s Day gift in the Hansen household.” Sen. Elizabeth Warren, DMass., was equally blunt: “There’s no question” that Taylor Hansen’s family ties posed a conflict of interest.

A spokesman for Bill Hansen said no one representing the company had asked Taylor Hansen to intervene on its behalf.