September 28, 2021
Today, Republican Leader of the Education and Labor Committee Virginia Foxx (R-NC) gave the following statement after yet another major student loan servicer, Navient, announced it would end its federal contract:
“The Department of Education is bleeding and risks infecting millions of students with financial distress and ruin. This egregious incompetence is as problematic as it is preventable. This is further proof that the Department needs to work with its partners instead of blaming them for the Department’s own incompetence so that borrowers are not forced to dangle in uncertainty while President Biden plays games with their and taxpayers’ futures.”
Background: Today, Republican Leader Foxx and Senator Burr sent a letter to Secretary Cardona demanding transparency about his Department’s return to repayment plan. The student loan payment moratorium was first implemented by President Trump in March 2020 and has since been extended through executive and congressional authority. In total, the moratorium will cost taxpayers nearly $100 billion when it expires at the end of September. The return to repayment is further complicated by the fact two servicers will not extend their servicing contract with the Department. While 45 million borrowers will begin making payments again in four months, the Department has provided little guidance as to how they and stakeholders will undergo this operation. Republican Leaders Foxx and Burr first inquired about the return to repayment in June but have yet to receive a response to that letter, as well as to a follow up letter sent in July.