Sen. Elizabeth Warren and three other liberal senators are raising concerns about how the Department of Education and federal student loan servicers are handling the return of student loan payments after a three-plus year, pandemic-related pause.
Federal student loan payments resumed in October, but the 12-month on-ramp period provided by the Department of Education for struggling borrowers could experience implementation errors and potentially cause “unanticipated consequences” to borrowers’ credit scores through next September, the senators warn in a letter sent to the Department of Education on Friday and first shared with CNN.
“The chaotic resumption of federal student loan payments has raised questions about the extent of errors and the measures being taken by the Department to address these concerns and provide assistance to affected borrowers,” said the letter, which was signed by Warren of Massachusetts, fellow Democratic Sens. Richard Blumenthal of Connecticut and Chris Van Hollen of Maryland, and independent Sen. Bernie Sanders of Vermont.
The senators have requested the Department of Education to provide them with an audit of the number of borrowers who missed their October student loan payment, as well as to answer several questions about the agency’s processes regarding the on-ramp period and its oversight of student loan servicers.
In a statement sent to CNN, the Department of Education said it “received the letter and will review it.”
Federal student loan payments and interest were frozen from March 2020 until September 2023. The pandemic benefit was extended several times by both the Trump and Biden administrations until a law passed earlier this year by Congress set a final expiration date.
Bringing roughly 28 million people back into repayment at the same time was an unprecedented task, and industry experts…
Read the full article here
Leave a Reply