February 24, 2022

Warren, Underwood, Allred, Colleagues to Education Department: What Steps Are You Taking to Help Borrowers When Student Loan Payments Resume?

With Less than 70 Days Until Loan Payment Pause Ends, Millions of Borrowers Are At Risk of Missing Out on Vital Information About Payment Restart

GAO Found Half of Borrowers at Increased Risk of Delinquency

Text of Letter (PDF)  |  Responses from Student Loan Servicers

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass) and Representatives Lauren Underwood (D-Ill.) and Colin Allred (D-Tex.) led a letter to Secretary of Education Miguel Cardona requesting information about actions the Department of Education (ED) will take to help student loan borrowers and ensure they are adequately informed about the restart of federal student loan payments as the scheduled end of the payment pause approaches on May 1, 2022. 

The letter is also signed by Senators Maggie Hassan (D-N.H.) and Tammy Duckworth (D-Ill.) and Representatives Dina Titus (D-Nev.), and Bill Foster (D-Ill.), Lucy McBath (D-Ga.). 

“(W)e are concerned that with less than 70 days until the scheduled expiration, borrowers may lack clarity about the timeline associated with the resumption of payments. Providing this detail is critical to ensure that borrowers are adequately informed about the restart and that borrower harm is minimized during the transition,” the lawmakers wrote. 

Following a two-year pause, ED is scheduled to resume collection of federal student loan payments, interest accrual, and involuntary collection of defaulted loans for more than 42.3 million borrowers on May 2, 2022. A Government Accountability Office (GAO) report estimates that about half of all federal student loan borrowers are at increased risk of delinquency and in need of additional, targeted engagement before and after payments resume. ED is using email as its primary borrower communication method, but as of December 2021, the agency was missing valid email addresses for approximately 5.5 million borrowers. Additionally, the contractor managing defaulted loans did not have email addresses for about 25% of defaulted borrowers. Other major changes to the student loan program, including the departures of three federal student loan servicers (Navient, PHEAA, and Granite State), also risk compounding borrowers’ lack of clarity around the restart. 

As the May 1 restart date approaches, the lawmakers are seeking updated information about key dates associated with the resumption of student loan payments including when the first loan payments are due; the dates on which borrowers will become delinquent, be charged late fees, have negative credit reports triggered, receive collection notices, or be placed into default status and subject to wage garnishment; the processes ED has in place to prevent borrowers from entering delinquency; and how ED intends to notify borrowers about the resumption of payments. 

Senator Warren also released a series of responses from student loan servicers about their ability to protect borrowers during the transition to repayment. She wrote to the servicers on November 3, 2021 November 22, 2021 and December 2, 2021.

Senator Warren is one of the nation’s leading voices for student loan borrowers, holding student loan servicers accountable for predatory practices that harm and trap borrowers in years of debt and leading the call for student debt cancellation to boost our economy and help close the racial wealth gap for borrowers.

  • Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representatives Pramila Jayapal (D-Wash.), Ayanna Pressley (D-Mass.), 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.
  • Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representative Ayanna Pressley (D-Mass.) released new analysis showing that resuming student loan payments would strip $85 billion every year from the economy.
  • Senator Warren, along with Senators Van Hollen (D-Md.), Blumenthal (D-Conn.), and Smith (D-Minn.), sent letters to four federal loan servicers, requesting information on their plans to support borrowers when student loan payments resume. 
  • Senator Warren, along with Senators Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Tina Smith (D-Minn.), and Chris Van Hollen (D-Md.) sent a letter to Maximus, the company that is assuming Navient’s federal student loans servicing contract, questioning its troubling history and seeking assurances that borrowers will receive appropriate services and protections during the transition. 
  • Senator Warren, along with Senators Cory A. Booker (D-N.J.), Sherrod Brown (D-Ohio), Bernard Sanders (I-Vt.), Richard Blumenthal (D-Conn.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Tammy Baldwin (D-Wis.), and Edward J. Markey (D-Mass.) sent a letter to the Department of Education urging Secretary Cardona to use his authority to automatically remove all student loan borrowers in default.
  • Senator Warren, along with Senators Van Hollen, Blumenthal, Brown, Smith, Edward J. Markey (D-Mass.), and Robert Menendez (D- NJ.) sent letters to the heads of Pennsylvania Higher Education Assistance Agency, Granite State, and Navient calling on them to correct past errors with borrowers’ accounts and address growing concerns over their preparedness to transfer millions of borrowers to new servicers. 
  • Senator Warren, along with Senator Edward J. Markey (D-Mass.) and Representative Ayanna Pressley (D-Mass.), released a report that detailed the ongoing failures of the Public Service Loan Forgiveness program for public servants in Massachusetts. 
  • At a hearing in July 2021, Senator Warren pushed for borrower protections after a major student loan servicing shakeup.
  • In July 2021, Senator Warren released a statement regarding the end of the Pennsylvania Higher Education Assistance Agency's (PHEAA) contract servicing student loans with the Department of Education .
  • In June 24, 2021, Senator Warren and John Kennedy (R-La.) called on PHEAA CEO to address concerns about false and misleading statements made during a subcommittee hearing on student loans, which was chaired by Senator Warren. 
  • In May 2021, Senator Warren led her colleagues in sending a letter requesting information about the steps the Department of Education and the Office of Federal Student Aid (FSA) are taking to help transition millions of federal student loan borrowers back into repayment ahead of the scheduled end to the pause on student loan payments and interest in September.
  • 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.
  • That same month at her first hearing as chair of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, Senator Warren called out PHEAA for its mismanagement of the Public Student Loan Forgiveness Program.
  • Senator Warren also questioned Jack Remondi, CEO of Navient, on the company's long history of abusive and misleading behavior towards borrowers and their profiting off the broken student loan system.
  • Senator Warren has also been continuing her calls for President Biden to use his existing authority to cancel $50,000 in student debt and highlighted data that she obtained from the Education Department revealing the benefit of student debt cancellation.
  • In March 2021, Senators Warren and Bob Menendez (D-N.J.) applauded the passage of their Student Loan Tax Relief Act as part of the American Rescue Plan. The provision makes any student loan forgiveness tax-free, ensuring borrowers whose debt is fully or partially forgiven are not saddled with thousands of dollars in surprise taxes. During her time in the Senate, she has helped return tens of millions of dollars tax-free to students cheated by for-profit colleges.
  • She demanded that the Department of Education hold student loan servicer, Great Lakes Education Loan Services, Inc., accountable for CARES Act blunder that likely lowered credit scores for millions of borrowers.
  • She has worked with House Majority Whip James E. Clyburn (D-S.C.) to close the racial wealth gap by introducing legislation, the Student Loan Debt Relief Act, which would cancel student loan debt for 42 million Americans.
  • She prioritized student debt relief and fought to lower student loan interest rates, introducing the Bank on Students Loan Fairness Act as her first bill in Congress.
  • She conducted rigorous oversight of the for-profit college industry and helped secure three-quarters of a billion dollars in debt relief for students who were cheated by predatory for-profit colleges, including 4,500 Massachusetts students and more than 28,000 students across the country.