April 27, 2015

Sen. Warren and Rep. Cummings Join Colleagues in Asking ED, Federal Student Loan Servicers About Efforts to Assist Struggling Borrowers

Letters Express Concerns About Relief for Students at Corinthian Colleges, Which Closed Remaining Campuses Today; Seek Documents, Data from Education Department and Loan Servicers

WASHINGTON, DC ­­- Today, Senator Elizabeth Warren (D-Mass.) and United States Congressman Elijah Cummings (D-Md.), Ranking Member of the House Committee on Oversight and Government Reform, led a bicameral letter asking the U.S. Department of Education (ED) and four federal student loan servicers about their efforts to advise struggling student borrowers about relief options available to them under federal law. The letter also was signed by Senators Dick Durbin (D-Ill.), Jack Reed (D-R.I.), Al Franken (D-Minn.), and Edward J. Markey (D-Mass.).

In their letters, the members explain that Congress gave ED a number of tools to protect student loan borrowers, such as the authority to discharge student loan debt when their academic institutions engage in unscrupulous or fraudulent activities. However, the members said they are "concerned that students may not be receiving adequate information about the relief options available to them."

“Congress created these relief provisions to ensure that student loan borrowers are treated fairly,” the letter states.  “Students should not have to hire attorneys or become private investigators to find out what the government already knows—that they are eligible for student loan relief under federal law.”

The letters noted particular concern about students who attended Corinthian Colleges, which was found by federal and state regulators to have engaged in unfair and deceptive practices to get students to enroll and take on loans. Corinthian had previously closed or sold 97 of its campuses under a 2014 agreement with ED, and on Sunday announced it was closing the remainder of its campuses.

The members asked ED today to “take immediate action to identify and inform students with loans eligible for relief that they may qualify for discharge or cancellation.” Additionally, the members wrote to servicers Pennsylvania Higher Education Assistance Agency, Great Lakes Higher Education Corporation & Affiliates, Nelnet Education Planning and Financing, and Navient requesting that they provide information about the number of students they have determined to be eligible for loan discharge or cancellation and how many they have informed about available relief.

Read the members’ letters here: