January 04, 2018

Warren Questions Federal Student Aid Chief on Student Loan Servicing and Borrower Protection

Text of Letter (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent a letter today to Dr. A. Wayne Johnson, Chief Operating Officer of the Office of Federal Student Aid (FSA) at the Department of Education, asking him about his specific plans for reducing student loan delinquencies and defaults, holding student loan servicers and contractors accountable, and improving customer service for the over 42 million student borrowers. Senator Warren asked Dr. Johnson 40 specific questions and invited him to meet with her in person to discuss his vision for FSA.

There are currently 8.6 million borrowers in default on nearly $150 billion in federal student loans and over a million student borrowers defaulted in the past year alone. The Consumer Financial Protection Bureau estimates that one in four borrowers are either in default on or are struggling to repay their federal student loans.

"The Chief Operating Officer's actions can make an enormous difference in the financial lives of millions of Americans," wrote Senator Warren. "You now have the responsibility of improving the student loan experience for tens of millions of federal student loan borrowers, and of effectively managing the student loan program with the best interests of students in mind."

In November 2017, the U.S. Department of Education and FSA announced the "Next Generation Financial Services Environment", the Trump Administration's blueprint and vision for federal student loan servicing. The Education Department announced plans for significant technology, customer service, and operational infrastructure changes for over 40 million federal student loan borrowers over the next two years. In today's letter, Senator Warren responded to FSA's vision, expressed five specific concerns with the plan, and urged the Department to put student loan borrowers first.

"Federal student loan borrowers deserve better that what they have experienced over the past decade," wrote Senator Warren. "This matters so much to me because a student borrower's interaction with an FSA contactor about her student loan may be her first and most impactful interaction with the federal government. We have to get this right. 

In March of 2016, Senator Warren announced "Five Fundamentals to Reform Student Loan Servicing." If the FSA adopted these reform fundamentals into its new vision for servicing reform, defaults and delinquencies would decrease and student borrowers would benefit. In the letter, Senator Warren asked Dr. Johnson to consider implementing these reforms.