Warren, Harris, Colleagues Raise Concerns Over Private Debt Collectors in Higher Education
Washington, DC - Today, United States Senators Elizabeth Warren (D-Mass.) and Kamala D. Harris (D-Calif.) led a group of Democratic senators in a letter to Secretary of Education Betsy DeVos and Federal Student Aid COO Dr. A. Wayne Johnson over the use of private sector collection agencies who are contracted to pursue defaulted student loan borrowers. Private debt collectors are incentivized to aggressively pursue defaulted student loan borrowers and do so while profiting from taxpayer dollars. Recently, the Department of Education renewed contracts with private debt collectors - including one with previous ties to Secretary DeVos - worth potentially millions of dollars.
"Access to an affordable education is one of the promises of American society," the senators wrote. "After all, education is more than the mere pursuit of a diploma. It is a transformational experience that empowers individuals to live full lives, both intellectually and economically. As public officials, we should work together to fulfill this vital duty for the people we serve."
The senators continued, "The very goals of private collection agencies are not aligned with the goals of federal student aid programs. The student loan program is designed to help borrowers receive access to credit at terms more favorable than what the private market would otherwise provide. This extends to the repayment process, where struggling borrowers have several options available to reduce or pause repayment. These benefits demonstrate that federal loan repayment is about the long-term success of borrowers, not simply maximizing funds repaid. It is about fulfilling the promise of an affordable education."
In addition to Senators Warren and Harris, the letter was signed by Senators Patty Murray (D-Wash.), Kirsten Gillibrand (D-N.Y.), Catherine Cortez-Masto (D-Nev.), Ron Wyden (D-Ore.), Mazie Hirono (D-Hawaii), Patrick Leahy (D-Vt.), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Dick Durbin (D-Ill.), and Dianne Feinstein (D-Calif.).
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