Examining Student Loan Servicers and Their Impact on Workers

On May 5, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on student loans and their impact on workers. During the hearing, Congressional Democrats continued to call on President Biden to forgive $50,000 per borrower. While President Biden has ruled out the idea of forgiving $50,000 per borrower, he will make a final decision before the pause in student loan repayment expires on August 31.

This hearing comes on the heels of a recent listening tour by Chairman Sherrod Brown (D-OH) and other committee members on student loan debt, as well as a recent announcement by the Department of Education on its plan to fix the income-driven repayment forgiveness program. As mentioned in a previous Washington Insights and Highlights Newsletter, the Biden Administration announced its plans to fix the program and to address the issue of “forbearance-steering,” by requiring loan servicers to provide borrowers with clear and accurate information for staying out of delinquency, as well as the financial consequences of choosing short-term options of forbearance. The department will address forbearance steering by conducting a one-time account adjustment that will count forbearances of more than 12 months consecutive and more than 36 months cumulative toward forgiveness under IDR and Public Sector Loan Forgiveness (PSLF). For more detailed information about the department’s plans for fixing these loan programs, please read the press release.