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Earlier this month, the Department of Education took a big step towards deregulating the student loan repayment process. Under new Secretary Betsy DeVos, the agency rolled back guidelines designed to protect student loan borrowers by directing federal agencies to judge student loan servicers based on their past records when issuing new contracts.
DeVos said that the decision was meant to shore up shortcomings that put an undue burden on student loan servicers and led to deficiencies in service, but critics immediately called the notion preposterous and said that the rollback rescinded commonsense consumer protections that had led to a higher level of service for borrowers. It seems that many attorneys general agree with that assessment. In a letter delivered yesterday, attorney generals from 21 states sent a letter to DeVos expressing their concern and discontent with the Department s decision.
We, the undersigned Attorneys General . . . write to express our profound concern regarding the Department of Education s revocation of critical student loan servicing reforms. The memoranda withdrawn by the Department on April 11, 2017 provided guidance designed to reform the student loan servicing industry in order to protect student loan borrowers and help these borrowers find affordable ways to repay their debts and avoid default, the letter reads.
At a time when the need for common-sense federal student loan servicing reforms is undeniable, the Department s decision to roll back essential protections imperils millions of student loan borrowers and families.
Abdicating its responsibility
The AG s point out that the guidelines allowed student loan borrowers to manage their loans, save money, and make informed decisions about their repayment options. However, with their repeal, the AG s say that consumers have become mired in ambiguity and inconsistency that the servicing reforms were intended to prevent. The letter points to several cases where consumers were misled or misguided by servicers, including recent cases brought against ACS Education Services in Massachusetts and Navient in Washington and Illinois. Investigations and enforcement actions undertaken by the state attorneys general have repeatedly revealed the havoc that student loan servicers poor practices and servicing failures wreak on the lives of borrowers, the AG s said.
In summation, the AG s say that one of the primary roles of the Department of Education is to create and enforce standards that protect student loan borrowers, but they believe that the recent actions go in the opposite direction and ultimately fail consumers.
The Department s stated rationale does not justify summarily denying student borrowers basic protections. . . The guidance revoked by the Department was expressly designed to protect borrowers and correct pervasive student loan servicing failures that harm student loan borrowers and their families. By revoking these critical protections, the Department has abdicated its responsibility to student loan borrowers.
We urge you to reconsider immediately, the letter concludes. The letter was signed by the attorneys general of Massachusetts, Illinois, California, Connecticut, Hawaii, Iowa, Kentucky, Maine, Maryland, Minnesota, Mississippi, New Mexico, new York, North Carolina, Oregon Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, as well as by the executive director of the Office of Consumer Protection of Hawaii. A full transcript of the letter can be found here.
The Indiana school directors on Monday came up divided on whether they believe teachers ought to be allowed to carry firearms in school as a safety precaution. Their comments came in response to state Senate Education Committee approval last week of a guns-in-schools measure sponsored by Sen. Don White, R-Indiana. If approved, White s bill would loosen a state law that now bans possession of weapons on school property by anyone but police or professional security officers. The talk came during discussion of whether the district should expand the presence of armed security protection in the schools. The school board in October contracted with Armstrong Lock & Security LLC, of Kittanning, to station an armed guard during school hours in Indiana Area Senior High School at a cost of about $42,000 a year. The company generally employs retired law enforcement officers to perform school security duties.
The directors also came up undecided on whether to add the expense of security for more buildings to the pending 2017-18 budget. The board is scheduled to vote on a tentative budget on May 8 but has until June 30 to enact a final spending plan for next year. No one voiced opposition to White s legislation, which would give local school boards the power to set their own policies and decide whether to let teachers with proper training and permits to bring their own guns to school. They were split on whether Indiana Area School District needs that privilege.
I don t have a problem with arming teachers who will be well trained, said director Diana Paccapaniccia. We do live in Indiana County where about one-third of the people have concealed carry permits. But this is legislation that I would support, and again, it would be the board s decision.
Board member Walter Schroth said White s law would benefit school districts in outlying areas where police response to an emergency likely would take a long time, but said it s unnecessary for Indiana because as many as 40 to 50 law enforcement officers from Indiana Borough, state police, the Indiana County sheriff s office and the Indiana University of Pennsylvania campus are only minutes away.
The right way is the outside agency and not so much armed teachers, Schroth said. He said he doubts whether teachers could muster the emotional detachment needed to halt violent students as easily as they could act against strangers on a rampage.
Teachers tend to be more nurturing, Schroth said. What happens if a student who has built a relationship with a teacher turns out to be the bad actor?
A teacher who tries to coax a familiar but armed student to lay down a weapon could as easily become a victim when SWAT team members take their calculated steps to end any further threat of bloodshed, he said.
Joseph Boudreaux says taking Johnson & Johnson’s blood-thinning drug Xarelto was one of the biggest mistakes of his life. While Xarelto was supposed to help cut his stroke risk, Boudreaux says it instead caused internal bleeding that required a week-long hospital stay in the intensive-care unit, several blood transfusions and multiple heart procedures. “I don’t want anybody else to suffer like I have from that drug,” the part-time security guard says. Starting Monday, Boudreaux will get a chance to have jurors hold J&J and Bayer, which jointly developed Xarelto, responsible for the treatment’s potentially fatal side effects as his case in New Orleans becomes the first lawsuit targeting the medicine to go to trial.
The companies are facing more than 18,000 U.S. patient suits blaming the blood thinner for internal bleeding. The medicine also has been linked to at least 370 deaths, according to Food and Drug Administration reports. The drug is Bayer’s top-selling product, generating $3.24 billion in sales (3 billion euros) last year and $2.5 billion (2.3 billion euros) in 2015 for the Leverkusen, Germany based pharmaceutical company. Xarelto is J&J’s third-largest seller, bringing in $2.29 billion in 2016 as the New Brunswick, New Jersey, company seeks to replace revenue from its Remicade arthritis treatment, which lost patent protection a year ago. Boudreaux’s case is the first of four suits overseen by U.S. District Judge Eldon Fallon in New Orleans slated for trial over the next three months.
“The allegations made in the Xarelto lawsuits contradict years of data on the medicine and the FDA’s determination of its safety and efficacy,” said William Foster, a spokesman for J&J’s Janssen unit that sells the drug in the U.S.
Bayer officials contend that despite some patient complaints, Xarelto’s bleeding risks are fully outlined on the medicine’s warning label and well known by prescribing doctors. “Bayer stands behind the safety and efficacy of Xarelto, and will vigorously defend it,” spokeswoman Astrid Kranz said in an emailed statement. U.S. regulators approved Xarelto in 2011 to prevent blood clots in users undergoing knee and hip surgeries. The drug’s use has been extended to patients, such as Boudreaux, who suffer from irregular heartbeats and are at high risk of stroke. Xarelto belongs to a new class of drugs aimed at replacing Bristol-Myers Squibb Co.’s Coumadin, which has thinned patients’ blood since the 1960s. Other new thinners include Pradaxa made by Boehringer Ingelheim GmbH, a German company that paid $650 million in 2014 to settle thousands of suits claiming it hid the medicine’s bleeding risks.
J&J and Bayer are accused of falsely marketing Xarelto as more effective at preventing strokes than Coumadin and easier to use, because Xarelto patients didn’t need frequent tests to monitor blood-plasma levels. Lawyers for Boudreaux and other former Xarelto patients stress the drug has no antidote, so it puts some users at high risk for bleeding out if they suffer an injury. Coumadin’s blood-thinning effects can be stemmed.
“This trial is an important first step in gaining broader awareness of one of the most high-risk drug treatments in medicine today,” Andy Birchfield, one of Boudreaux’s lawyers, said in an email. J&J and Bayer officials should have warned consumers they could be tested to gauge their Xarelto bleed-out risk, patients’ attorneys claim. The companies “concealed their knowledge of Xarelto’s defects from physicians, the FDA, the public and the medical community,” Boudreaux’s lawyers said in the filing.
J&J and Bayer point to the FDA’s finding that Xarelto is “safe and effective” for patients seeking to avoid stroke-causing clots to buttress claims the drug doesn’t pose undue risks, according to court papers. The pharmaceutical makers also argue Boudreaux and other patients can’t prove doctors would have avoided prescribing the drug even if they’d had the kind of bleeding warnings sought by the plaintiffs, according to court filings. “Xarelto’s label is adequate as a matter of law,” the companies’ attorneys said. Boudreaux’s case serves as a bellwether to help decide the Xarelto claims’ strength, said David Logan, a mass-tort law professor at Roger Williams University in Rhode Island. Fallon will allow a number of such trials to see if jurors rule for patients and award damages, Williams said. “Once the results are in, the parties may feel more confident about whether to settle the remaining claims,” he said.
Xarelto cases filed in federal courts around the U.S. have been consolidated before Fallon while other suits are awaiting trials in state courts in Pennsylvania and Delaware. Fallon previously oversaw suits against Merck & Co. targeting its Vioxx painkiller that resulted in a $4.85 billion settlement.
“Judge Fallon has been through the process several times,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia. “He knows how to get suits to trial that will give the companies and plaintiffs a good feel for what these cases are worth.”
Bloomberg’s Della Hasselle contributed.