Senator Warren and Representative Pressley Seek To Ensure that Student Loan Servicers are Providing Borrowers With Accurate and Timely Information about Student Loan Cancellation
Warren and Pressley Raise Concerns About Navient Sales Tactics That Could Cause Borrowers to Lose Eligibility for Cancellation
“These tactics are unconscionable: just weeks after President Biden announced his plans to provide student loan relief for millions of borrowers, Navient is attempting to place them into refinanced loans that are ineligible for relief.”
Washington D.C. – U.S. Senator Elizabeth Warren (D-Mass.) and Representative Ayanna Pressley (D-Mass.) sent a letter to the nine federal student loan servicers to inquire about the steps they are taking to ensure that borrowers are receiving accurate and timely information about President Biden’s cancellation of up to $20,000 of student loan debt, and other upcoming changes to the student loan system. They also sent a separate letter to Navient Corporation (Navient) in response to reports that Navient is attempting to scam borrowers out of student debt relief by encouraging them to refinance their loans under Navient’s private lender, NaviRefi.
“As borrowers await further guidance from the Department of Education about President Biden’s historic decision to cancel up to $20,000 in student debt for as many as 43 million borrowers, we are profoundly troubled by reports that Navient is providing grossly misleading guidance to borrowers that could make them ineligible for loan forgiveness under the President’s plan,” said the lawmakers.
“Following President Biden's life-changing action to cancel student debt for millions of Americans, Navient appears to be misleading and misinforming student borrowers on their options – potentially keeping borrowers indebted with private loans while federal relief is in sight,” said Senator Elizabeth Warren. “Alongside Congresswoman Pressley, I’m working to ensure federal borrowers receive accurate information regarding student debt cancellation and will continue oversight throughout the implementation of this policy.”
“We’re putting the servicers on notice,” said Representative Ayanna Pressley. “It’s imperative that servicers provide borrowers with accurate and up-to-date information on their student loans. Thanks to President Biden's plan to cancel student debt, millions are now eligible for meaningful student loan debt cancellation and we need to ensure it is administered efficiently and felt by as many people as possible. Senator Warren and I want answers.”
Following President Biden’s historic decision to cancel student loans for 43 million Americans, student loan servicers will be critical partners in ensuring that borrowers receive this life-changing relief, both leading up to and during the implementation of these reforms. Sen. Warren has a long track record of conducting oversight of federal student loan servicers, revealing that servicers like Naveint have a track record of communicating incorrect and misleading information to borrowers. Even prior to the president’s announcement, two servicers mistakenly notified some borrowers that their payments were due in September.
Navient sent multiple emails to borrowers following the cancellation announcement offering refinancing options that would result in borrowers losing eligibility for the benefits offered by the President’s plan.
“Servicers must ensure that they are appropriately staffed to handle the increased volume of borrowers calling to get information about the administration’s recent announcements, that they are providing accurate information to borrowers, that they have strong systems in place to ensure balances and payments are adjusted accurately, and that borrowers are notified about these changes on a timely basis,” said the lawmakers.
Senator Warren and Representative Pressley are asking the loan servicers to provide clear answers to ensure that these companies are prepared to help borrowers and properly manage their loans as the administration works to implement student debt cancellation and reform the repayment system.
Senator Warren is one of the nation’s leading voices for student loan borrowers and has a long track record of conducting oversight of federal student loan servicers:
- In September 2022, Senator Warren sent a letter to the Department of Justice (DOJ) urging DOJ to issue and implement updated student debt bankruptcy guidance without delay following the Biden-Harris administration’s historic decision to cancel up to $20,000 in student debt for up to 43 million borrowers and overhaul the student loan system.
- Senator Warren, along with Senate Democratic Whip Dick Durbin (D-Ill.), Senator Sherrod Brown (D-Ohio), and U.S. Representatives Pramila Jaypal (D-Wash.) and Mark Takano (D-Calif.), urged Secretary of Education Miguel Cardona, urging the Department of Education (ED) to swiftly discharge the loans of borrowers defrauded by predatory for-profit colleges and universities, including those operated by Corinthian College.
- 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.
- 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.
- Last Congress, Senator Warren introduced the Consumer Bankruptcy Reform Act and in 2019, co-led the Student Borrower Bankruptcy Relief Act with Senator Durbin (D-Ill.) to make student loans dischargeable through bankruptcy.
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