Senators Warn Education Dept. of Risks to Borrowers When Student Loan Payments Resume
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Sen. Warren and other senators sent a letter to the Dept. of Education raising concerns about the rocky return to student loan repayments and potential errors harming borrowers' credit.
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The letter commends increased oversight of loan servicers after one major servicer failed to send bills to 2.5 million borrowers, but more accountability is still needed.
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The senators warn the Dept's new 12-month "on-ramp" period before reporting missed payments may still allow credit bureaus to ding borrowers' credit.
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The letter raises concerns about bureaucratic complexities and insufficient oversight leading to errors that hurt borrowers, citing past problems with other repayment pauses.
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The Biden administration has provided record levels of student loan forgiveness totaling $127 billion for 3.6 million borrowers, in addition to the new SAVE repayment plan.