August 04, 2025

Warren, Sanders, Schumer, Lawmakers Press Private Student Loan Lenders on Plans for Borrowers After Republicans Slash Access to Federal Loans

Warren, Sanders, Schumer, Lawmakers Press Private Student Loan Lenders on Plans for Borrowers After Republicans Slash Access to Federal Loans

Trump’s “Big, Beautiful Bill” paves the way for private lenders to reap massive profits by exploiting borrowers

Text of Letters (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) led eight Senators in pressing major private student loan lenders on their plans to serve the incoming surge of borrowers who will be pushed to the industry because of Republicans’ recently passed “Big, Beautiful Bill.” The legislation, in addition to stripping health insurance and food assistance from millions of Americans, will also hurt families by drastically cutting access to federal student loans, driving families towards more expensive and often predatory private loans to finance higher education. The lawmakers wrote to Navient, Nelnet, Sallie Mae, and SoFi.

The following Senators joined Senator Warren’s letter: Democratic Leader Chuck Schumer (D-N.Y.); Bernie Sanders (I-Vt.), Ranking Member of the Senate Health, Education, Labor and Pensions Committee; Richard Blumenthal (D-Conn.); Mazie Hirono (D-Hawaii); Ron Wyden (D-Ore.); Chris Van Hollen (D-Md.); Ed Markey (D-Mass.); and Jeff Merkley (D-Ore.)

“Given the private student loan industry’s track record of shamelessly taking advantage of borrowers, we are seeking answers on how you will serve the students and families who will be forced into the private loan market by this new law and be further harmed by the Trump Administration’s moves to decimate protections against exploitative behavior by private lenders,” wrote the lawmakers.

Donald Trump’s “Big, Beautiful Bill,” passed by Republicans in Congress last month despite opposition from every single Democratic member, codified significant cuts to federal student loan access by drastically lowering caps on loan amounts that can be borrowed by graduate students and parents of undergraduate students. The caps are set far below the prices of attending many academic programs, forcing many students and families to turn to private lenders to finance their education.

The bill will also force new borrowers who sign up for income-driven repayment to enroll in the new Repayment Assistance Plan (RAP), which will set significantly higher monthly payments for many borrowers — in some cases, by hundreds of dollars more per month. Because of these higher monthly payments, a greater number of borrowers may refinance their loans with private lenders, putting borrowers at a greater risk of being harmed by financially predatory practices.

Private lenders typically have higher interest rates, and the companies that service these loans have a track record of abusive practices such as deceptive billing statements, shady marketing around refinancing and federal student loan forgiveness, false promises around unemployment protections, and more. Private lenders also have a track record of discrimination and predatory lending tactics. Although the private student loan market currently accounts for 8 percent of student loan debt, it represents more than 40 percent of student loan-related complaints submitted to the CFPB.

“This new approach is an explicit goal of the Trump Administration…and private student loan lenders have made no secret of their appetite to cash in on such an agenda,” wrote the lawmakers.

The shift comes while President Trump and Secretary of Education Linda McMahon have worked to dismantle the federal workforce responsible for protecting borrowers. The administration gutted the Department of Education’s office of the Student Loan Ombudsman, responsible for addressing borrower complaints, and decimated the vendor oversight team, which ensures that loan servicers abide by consumer protection laws and properly service student loans. The Trump Administration has also tried to fire the vast majority of employees at the Consumer Financial Protection Bureau (CFPB), which protects consumers, including student loan borrowers, from financially exploitative practices.

Over the past decade, private equity firms have also begun buying up legacy student loan portfolios from banks, raising additional concerns about predatory and abusive collection practices and lack of meaningful relief for borrowers.

“Student debt places a tremendous burden on borrowers, their families, their communities, and the U.S. economy, driving employment, spending, and housing decisions that have long-lasting negative impacts on borrowers’ financial health,” wrote the lawmakers. “Placing a greater share of student loans into the hands of private lenders threatens to make these problems much worse.”

Senator Warren has led the fight to make our higher education system more affordable, cancel student loan debt, and hold student loan servicers accountable for incompetence and malfeasance. She also launched the Save Our Schools campaign in a coordinated effort to fight back against President Trump’s attempts to abolish the Department of Education:

On July 17, 2025, Senator Warren released a new 23-page report, “Education At Risk: Frontline Impacts of Trump’s War on Students,” highlighting warnings from 11 major national education and civil rights organizations on the impact of the Trump Administration’s dismantling of the Department of Education (ED), slashing support to millions of American students, primary and secondary school teachers, administrators, parents, and student loan borrowers.
On July 15, 2025, Senators Warren and Sanders, along with Senate Democratic Leader Chuck Schumer, sent a letter to Secretary of Education Linda McMahon, urging her to reverse the interest hike on student loan borrowers in the SAVE forbearance.
On July 14, 2025, Senator Warren joined a letter to the director of the Office of Management and Budget, Russ Vought, and Secretary of Education, Linda McMahon, demanding that the Department of Education stop blocking nearly $7 billion in funds for K-12 schools, including for afterschool programs.
On July 3, 2025, Senator Warren led her colleagues in submitting an amicus brief for NAACP v. US, arguing to the United States District Court District of Maryland that President Trump’s attempts to dismantle the Department of Education violate separation of powers and lack constitutional authority.
On June 10, 2025, Senator Warren met with Secretary of Education Linda McMahon and delivered over 1,000 letters to McMahon that the senator had received from people in all 50 states who were worried about the Secretary’s efforts to dismantle the Department of Education.
On June 9, 2025, Senator Warren led her colleagues in pushing the Acting Inspector General of the Department of Education to open an investigation into new information obtained by her office, revealing that DOGE may have gained access to two FSA internal systems, in addition to sensitive borrower data.
On May 20, 2025, Senator Warren and 27 other senators pushed for full funding for the Office of Federal Student Aid.
On May 14, 2025, Senator Warren led a Senate forum entitled “Stealing the American Dream: How Trump and Republicans Are Raising Education Costs for Families,” highlighting the consequences of Secretary Linda McMahon’s reckless dismantling of the Department of Education and President Trump’s “big, beautiful bill” for working- and middle-class students and borrowers.
On May 13, 2025, Senator Warren agreed to meet with Education Secretary Linda McMahon and promised to bring questions and stories from Americans across the country to highlight how the Trump administration’s attacks on education are hurting American families.
On May 6, 2025, Senator Elizabeth Warren highlighted the consequences of President Trump and Secretary Linda McMahon’s reckless dismantling of the Department of Education for American families in a Senate forum.
On April 24, 2025, Senator Warren launched a new investigation into the harms of President Trump’s attacks on the Department of Education, seeking information on the impact of the Trump administration’s actions from the members of twelve leading organizations representing schools, parents, teachers, students, borrowers, and researchers.
On April 10, 2025, following a request led by Senator Warren, the Department of Education’s Acting Inspector General agreed to open an investigation into the Trump administration’s attempts to dismantle the Department of Education.
On April 2, 2025, Senators Elizabeth Warren and Mazie Hirono, along with Senate Democratic Leader Chuck Schumer, sent a letter to Secretary of Education Linda McMahon regarding the Department of Government Efficiency’s proposed plan to replace the Department of Education’s federal student aid call centers with generative artificial intelligence chatbots.
On April 2, 2025, Senator Elizabeth Warren launched the Save Our Schools campaign to fight back against the Trump administration’s efforts to dismantle the Department of Education and highlight the consequences for every student and public school in America.
On March 27, 2025, Senator Elizabeth Warren (D-Mass.) led a letter to Acting Department of Education Inspector General René Rocque requesting they conduct an investigation of the Trump Administration’s attempts to dismantle the Department of Education.
On March 20, 2025, Senators Elizabeth Warren and Bernie Sanders led a letter to Secretary of Education Linda McMahon regarding the Trump Administration’s decision to slash the capacity of Federal Student Aid to handle student aid complaints.
On February 24, 2025, in a response to Senator Warren, Secretary McMahon gave her first public admission that she “wholeheartedly” agreed with Trump’s plans to abolish the Department of Education.
On February 11, 2025, Senators Elizabeth Warren and Andy Kim sent Linda McMahon, Secretary-Designate for the U.S. Department of Education, a 12-page letter with 65 questions on McMahon's policy views in advance of her nomination hearing.
In February 2025, Senators Elizabeth Warren (D-Mass.), Tammy Duckworth (D-Ill.), and Richard Blumenthal (D-Conn.) wrote to the student loan servicer Missouri Higher Education Loan Authority (MOHELA) with continued concerns over its website’s Terms of Use, which appear to be written with the intent to relieve MOHELA of liability for severe misconduct and may infringe upon student loan borrowers’ legal rights.
In February 2025, during the Senate’s consideration of the Republican budget resolution, Senators Elizabeth Warren and Ed Markey (D-Mass.) proposed an amendment to protect higher education funding in Massachusetts.
In February 2025, Senators Elizabeth Warren, Jeff Merkley (D-Ore.), Ron Wyden (D-Ore.), and Amy Klobuchar (D-Minn.) led 32 Democratic senators in writing to President Donald Trump, demanding that he reject Congressional Republicans’ legislative plans to increase the cost of living, including education costs, for Americans after pledging to lower costs on “Day One” of his presidency.
In February 2025, following Elon Musk and DOGE forcing their way into the Department of Education, Senator Elizabeth Warren and Minority Leader Schumer (D-N.Y.) led a coalition of Democrats in demanding the Department of Education launch an investigation into Musk and DOGE’s access to federal student loan data.
In January 2025, Senator Elizabeth Warren sent Elon Musk, Chair of the Department of Government Efficiency (DOGE), a letter detailing over 30 proposals that would cut at least $2 trillion of wasteful government spending over the next decade, including through saving on education programs.
In December 2024, Senators Elizabeth Warren, Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), and Ron Wyden (D-Ore.) revealed the alarming findings of a Senate investigation into millions of consumer credit reporting errors that occurred during the transfer of student loan accounts from Nelnet to MOHELA in 2023. The senators urged the CFPB and ED to investigate these errors and use their supervisory and enforcement authority to hold the appropriate parties accountable.
In December 2024, Senator Elizabeth Warren (D-Mass.) and Congresswoman Madeleine Dean (D-PA) led 24 lawmakers in sending a bicameral letter to Consumer Financial Protection Bureau Director Rohit Chopra and Federal Trade Commission Chair Lina Khan, revealing the results of their investigation into Navient regarding its cancellation process for the predatory, for-profit student loans in its portfolio and urging the agencies to hold the student loan servicer accountable for any violations of federal law.
In November 2024, Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), and Tammy Duckworth (D-Ill.) sent a letter blasting MOHELA for abusing borrowers with potentially illegal, exploitative terms of use.
In October 2024, Senators Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), and Raphael Warnock (D-Ga.) sent a letter to the Department of Justice (DOJ) and Department of Education (ED) commending the agencies on their progress in helping borrowers who are struggling financially to discharge their student loans in bankruptcy and asking them to continue expanding awareness of the Biden-Harris administration’s new policy.
In October 2024, Senator Elizabeth Warren (D-Mass.) celebrated new federal student debt relief, bringing the total number of Americans who have had their debt canceled under the Public Service Loan Forgiveness (PSLF) program during the Biden-Harris Administration to a historic 1 million people and counting.
In September 2024, Senators Warren (D-Mass.) and Merkley (D-Ore.) released a new report examining the impact of the Biden-Harris administration’s new Higher Education Act rule, finding that low- and middle-income borrowers, seniors, women, and Black borrowers will receive enormous benefits from the new rule.
In September 2024, Senator Elizabeth Warren and Representative Jim Clyburn (D-S.C.) led 56 of their colleagues in a letter to the Department of Education (ED), calling on the Department to conduct an analysis as to whether the Higher Education Loan Authority of the State of Missouri (MOHELA) has adhered to its contracts with the federal government, and if not, to consider terminating those contracts.
In August 2024, Senator Warren joined Senators Jeff Merkley, Ron Wyden (D-Ore.), and Richard Blumenthal (D-Conn.) to launch an investigation into the reported mishandling of student loan transfers by MOHELA, Nelnet, and credit reporting agencies.
In August 2024, Senator Warren (D-Mass.) and Representative Madeleine Dean (D-Pa.) led over 30 lawmakers in a letter urging student loan servicer Navient to reform its flawed process to cancel the private student loans of borrowers who attended fraudulent, for-profit colleges.
In July 2024, Senators Warren, Ron Wyden, Chris Van Hollen, and Bernie Sanders sent a letter to Secretary of Education Miguel Cardona, cautioning the Department of Education on Federal Student Aid’s transition to the Unified Servicing and Data Solution system.
In July 2024, Senators Warren, Schumer, and Sanders released a joint statement on the American Federation of Teachers’ lawsuit against MOHELA for allegedly overcharging and misleading student loan borrowers.
In May 2024, Senators Warren and King led their colleagues in a letter to Education Secretary Miguel Cardona, urging them to provide guidance and communication to borrowers as the Public Service Loan Forgiveness program transfers from MOHELA to the Department of Education.
In May 2024, Senator Warren led a growing coalition of senators in urging the Department of Education to hold student loan servicer MOHELA accountable for its failures.
In May 2024, Senator Warren and 24 members of the U.S. Senate sent a letter to Senator Tammy Baldwin, Chair of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, and Senator Shelley Moore Capito, Ranking Member of the Subcommittee, encouraging them to provide $2.7 billion in funding to the Office of Federal Student Aid (FSA) in fiscal year (FY) 2025.
In May 2024, Senators Warren, Carper, Kaine, and Representative Don Davis (D-N.C.) called on the Department of Defense (DoD) to release data on the Postsecondary Education Complaint System (PECS), a centralized database to track complaints against schools that participate in the Tuition Assistance (TA) and My Career Advancement Account Scholarship (MyCAA) programs.
In April 2024, Senator Warren led eight of her colleagues in sending a letter to David L. Yowan, President and Chief Executive Officer of student loan servicer Navient, urging the servicer to cancel decades-old private student loans pushed onto borrowers attending fraudulent, for-profit colleges.
In April 2024, Senators Warren, Blumenthal, Markey, and Van Hollen released a new report: Servicing Scandals: Student Loan Servicers’ Failures During Return to Repayment, which reveals a decades-long pattern of student loan servicer incompetence and misconduct that has affected millions of borrowers nationwide.
In April 2024, Senator Elizabeth Warren led a hearing on student loan servicer Higher Education Loan Authority of the State of Missouri (MOHELA) and its failures during borrowers’ return to repayment, including MOHELA’s mismanagement of the Public Service Loan Forgiveness program.
In March 2024, Senators Elizabeth Warren and Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, along with U.S. Representatives Ayanna Pressley (D-Mass.), Pramila Jayapal (D-Wash.), Raúl Grijalva (D-Ariz.), and John Larson (D-Conn.), led their colleagues in calling on the Social Security Administration (SSA), the U.S. Department of the Treasury (Treasury), and the U.S. Department of Education to end the practice of offsetting Social Security benefits to pay off defaulted student loans.
In February 2024, Senator Warren, Majority Leader Chuck Schumer (D-N.Y.), and Senator Bernie Sanders (I-Vt.) released a statement calling for an investigation into student loan mismanagement by MOHELA.
In January 2024, Senators Warren, Schumer, Sanders, Warnock, and Padilla, along with Representative Ayanna Pressley, Assistant Democratic Leader Jim Clyburn (D-S.C.), Representative Frederica Wilson (D-Fla.), and Representative Ilhan Omar (D-Minn.), led their colleagues in calling on the Secretary of Education, Miguel Cardona, to host a fourth session of the student debt negotiated rulemaking to consider relief for borrowers experiencing financial hardship.
In December 2023, U.S. Senators Warren, Richard Blumenthal, Ed Markey, and Chris Van Hollen (D-Md.) sent follow-up letters to student loan servicers – MOHELA, EdFinancial, Nelnet, and Maximus – raising concerns about borrowers’ problems with return to repayment, requesting information about the borrower experience, and pushing back on the servicers’ claim that budget shortfalls limit their ability to provide quality customer service to millions of borrowers.
In December 2023, Senators Warren, Schumer, Sanders, Alex Padilla (D-CA) and Representatives Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn.), and Frederica Wilson (D-Fla.) sent a letter to the U.S. Secretary of Education Miguel Cardona, urging him to leverage his existing and full authority under the Higher Education Act to provide expanded student debt relief to working- and middle-class borrowers.
In August 2023, Senator Warren, Congresswoman Ayanna Pressley, Senate Majority Leader Chuck Schumer (D-N.Y.), Senators Alex Padilla and Raphael Warnock (D-Ga.), and U.S. Representatives Ilhan Omar, Jim Clyburn, and Frederica Wilson led 79 other lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working- and middle-class families by early 2024.
In October 2022, Senator Warren and Representative Ayanna Pressley (D-Mass.) visited communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief.
In March 2022, Senator Warren, along with Senate Democratic Whip Dick Durbin (D-Ill.), Senator Brown, and Representatives Pramila Jayapal (D-Wash.) and Mark Takano (D-Calif.), urged Secretary of Education Miguel Cardona to swiftly discharge the loans of borrowers defrauded by predatory for-profit colleges and universities, including those operated by Corinthian College.
In January 2022, Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representatives Jayapal, Pressley, Ilhan Omar (D-Minn.), and Katie Porter (D-Calif.), led more than 80 colleagues in a bicameral letter to the Department of Education calling for it to release the memo outlining the Biden administration’s legal authority to cancel federal student loan debt and immediately cancel up to $50,000 of debt for Federal student loan borrowers.
In April 2021, Senators Warren and Raphael Warnock (D-Ga.) led a group of colleagues in a letter to Education Secretary Miguel Cardona urging the Department of Education to take swift action to automatically remove all federally held student loan borrowers from default.

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