Elizabeth Warren is demanding the Biden administration detail the agency’s plan to reduce hardship and confusion as student loan payments are soon scheduled to restart.
for borrowers who miss their first payments after they restart, so that they won’t experience any impact to their credit. But about half of all federal student loan holders are at an increased risk of delinquency as payments resume, according to the Government Accountability office.
Many borrowers may not know that payments are resuming. The Education Department doesn’t have email addresses for about 5.5 million borrowers, and one servicer managing defaulted loans doesn’t have email addresses for about 25 percent of borrowers in default, the Democrats wrote. There are also issues with student loans bouncing around between servicers as the pause was ongoing. Three servicers managing loans for 12.2 million borrowers announced that they would no longer manage federal student loans last year, which may cause confusion.
The lawmakers concluded their letter by demanding that the Education Department lay out its plan to restart payments. The agency should provide information about whether borrowers in default will still be in default when payments restart, and if or when borrowers can expect to experience things like wage garnishment if they’re unable to make payments, the lawmakers said.
Student loans have become a flash point for Democrats and debt advocates, who have grown increasingly frustrated with President Joe Biden’s
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