Editor's Pick: Originally Published Wednesday, Dec. 23.
Senators Elizabeth Warren (D-Mass.), Orin Hatch (R-Utah) and Mike Lee (R-Utah) have voiced their bi-partisan opposition to the newly-authorized use of unsolicited "robo calling" to collect student loan debt in a December 21 letter to Secretary of Education Arne Duncan.
Federal law has generally barred unsolicited robo calls by debt collectors, but the Obama administration has skirted it and has long been a supporter of using robo calls as a telephonic debt collector.
A provision to use robo calls was tucked into a rider included in the federal budget passed by Congress.
"We are concerned that this provision will subject student loan borrowers to a barrage of unsolicited calls - and possibly leave them with no refuge to stop the calls," the senators said in a December 21 statement.
They noted that ED has offered no evidence that robo calling will help borrowers choose the right repayment plan and avoid default. What's more, the senators claim that there is no evidence that robo calling will assist the federal student loan program by generating meaningful revenue.
"The Department has an obligation to demonstrate with data that the use of this (robo call) authority will provide net benefits for both student loan borrowers and taxpayers and will not result in potentially abusive debt collection practices," the senators said in a joint statement. "In the absence of such data, the Department should not direct anyone, including third party debt collectors, to use robo calls to collect student loan debt."
The senators asked the Department of Education to explain the steps it will take to generate data on robo call usage and requested information about the Department's interpretation of its authority under the law.
In their letter, the senators assert that robo calls would be at variance with Title III of the budget, also known as the Bi-Partisan Budget Act of 2015.
"We believe that Title III does not permit robo calling to collect debts owed to or guaranteed by the federal government until the FCC (Federal Communications Commission) issues the implementing regulations Title III requires," they said. Those regulations have not been made. A response by the Department of Education has not been made available.
"The Education Department is exempting itself from important protections afforded to citizens, the protection that they will not be unnecessarily harassed by collection agencies, all without any concrete evidence that this will help reduce defaults on federal student loans," said Senator Hatch. "We need more clarity about whether this will actually provide a benefit, rather than cause harm."
What will ED get from an ability to make robo calls to borrowers? Not much, according to the Congressional Budget Office, which says that any gain would be little more than a rounding error in the context of the federal budget. Obama's Office of Management and Budget estimates that it would bring $12 million a year in additional revenue. The Federal Communications Commission, which has been fighting against robo calls, would be pressed into service as ED's robo call center, even though it has helped code developers devise apps to block robo calls.
In October Margot Saunders, of the Counsel to the National Consumer Law Center, ripped the Obama administration's use of robo calls.
"Giving one of the most abusive industries in the U.S. free rein to inundate people with robo calls to their cell phones is a terrible idea," said the Washington, D.C.-base Saunders in a statement. "Cell phone calls can distract people while driving, interrupt them at their jobs, and needlessly impose a cost on struggling families by using up scarce minutes. Debt collectors regularly call land lines to harass and threaten friends, family and even strangers with similar names to the debtor. No one will be safe from receiving abusive calls on their cell phones if this proposal goes through."