Progressive groups successfully pressed Education Secretary Miguel Cardona to replace the acting head of the office that oversees the nation’s $1.5 trillion student loan portfolio in recent weeks. Now, Abigail Seldin, a former student loan company executive, is reportedly a candidate to lead that office.
Seldin is best known for co-founding College Abacus, a college cost calculation tool. College Abacus has faced criticism from Student Aid Services, the company that manages the net price calculators for 700 colleges, for charging students for information that can be found for free on colleges’ websites. Student Aid Services also flagged that College Abacus provided inaccurate information, sometimes differing from college’s net calculators by a few thousand dollars.
In 2014, Seldin sold College Abacus to Education Credit Management Corporation (ECMC), a relentless student debt collector, and became an executive with the company. Seldin served as VP of Innovation and Product Management with ECMC from 2014 to 2016. ECMC has a long history of opposing student loan discharges in bankruptcy and even mounting legal action against students seeking relief, leading student advocates to accuse the organization of using “bulldog tactics to scare away someone who has a legitimate claim for relief.” Without relief from ECMC, desperate students facing bankruptcy struggle to afford rent, healthcare, and basic necessities, much less pay back their loans.
Here are a few of the most alarming elements of Seldin’s history:
Seldin co-founded College Abacus, a college cost calculation tool, that allegedly takes advantage of students seeking information on financial aid.
- In 2012, Seldin co-founded College Abacus, a tool to allow students to compare the net cost of attending different colleges.
- Critics of College Abacus argued that the tool was trying to profit from information that could be found on college websites for free. College Abacus allowed students to compare attendance costs of three colleges at a time for free, but charged $100 for a spreadsheet of the top 200 colleges and universities.
- In 2013, Seldin said that she considered selling students’ contact information in order to recoup the costs of College Abacus. Seldin maintains that College Abacus has never sold any data about students.
- Student Aid Services, the company that manages the net price calculators for 700 colleges, claimed that College Abacus’ results could vary by up to a few thousand dollars from the results produced by individual college’s net calculators.
In 2014, Seldin became an executive at Education Credit Management Corporation and sold College Abacus to them, despite the company’s reputation as a relentless student debt collector.
- In 2014, Seldin sold her College Abacus tool to ECMC for an undisclosed seven-figure sum.
- Seldin served as Vice President of Innovation and Product Management at ECMC between 2014 and 2016, and was paid nearly $300,000 as compensation.
- ECMC collects defaulted private student loans and has a long history of opposing student loan discharges in cases of bankruptcy, even when there was little hope of recovering any money. In a particularly egregious case, the organization refused to discharge the loans of a woman who filed for bankruptcy after contracting pancreatic cancer. ECMC has mounted legal challenges against this woman and other students like her who are desperate enough to seek bankruptcy relief. A panel of bankruptcy appeal judges in 2012 denounced what it called ECMC’s “waste of judicial resources” and said the group’s collection tactics “constituted an abuse of the bankruptcy process.”
- In 2016, Century Foundation researchers argued that ECMC was sitting on millions of dollars in accumulated surplus that could be used to relieve student debt, particularly from students defrauded by for-profit colleges.
- During Seldin’s tenure at ECMC, the company acquired 56 of the now-defunct for-profit Corinthian Colleges’ campuses. ECMC’s actions prevented some students defrauded by Corinthian from discharging their debts.
Seldin was a partner at NextGen Venture Partners, a venture capital fund that invested in the startup Vemo Education, which promoted the use of income share agreements for higher education financing.
- Seldin was a partner at NextGen Venture Partners, a venture capital firm that invested in the startup Vemo Education, which marketed income share agreements as an alternative to student loans.
- Consumer groups and congressional Democrats have criticized Income share agreements over deceptive marketing practices. In June 2020, the Student Borrower Protection Center and National Consumer Law Center filed a complaint with the Federal Trade Commission alleging that Vemo Education engaged in deceptive marketing that could result in college students paying thousands of dollars in unexpected costs. Senator Warren and Congresswomen Katie Porter and Ayanna Presley argued that income share agreements shared the same pitfalls as private student loans “with the added danger of deceptive rhetoric and marketing that obscure their true nature.”
- Consumer groups have also expressed concerns about the use of forced arbitration agreements and other provisions that bar students from filing for bankruptcy when participating in an income share agreement.
- Progressive policy experts have also raised concerns over the lack of transparency around income share agreements, and the fact that they are regulated less heavily than student loans. Income share agreements push risk back onto students in subtle ways by having less favorable terms for students who are enrolled in less profitable majors.