In full transparency, the following is a press release from the office of Senator Elizabeth Warren. She was elected by voters in the Commonwealth of Massachusetts to serve Washington DC State in the United States Senate. She is a Democrat. (file photo)
WASHINGTON DC – Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio) and Dick Durbin (D-Ill.) sent letters yesterday, April 15, to the Consumer Financial Protection Bureau (CFPB) and the Department of Education (ED), asking them to review reported mismanagement by student loan servicers of the Income Contingent Repayment (IDR) program, which caused significant harm to low-income borrowers.
Recent reports show that out of 4.4 million eligible borrowers, only 32 borrowers had their student loans canceled through IDR. Senators urge CFPB to investigate reports of mismanagement of IDR programs by student loan servicers and urge ED to repair harm to borrowers by enacting an IDR waiver that will help borrowers alleviate and cancel their debt .
“It is apparent that the IDR plans, as they currently stand, fall short of their original promise that federal student debt should be affordable and not a lifetime debt penalty, especially for low-income students. ED has a responsibility to ensure that borrowers do not bear the consequences of IDR implementation and monitoring failures and that IDR delivers on its promise of giving borrowers a light at the end of the tunnel” , the senators wrote in their letter to ED.
The senators’ letter comes after a recent NPR report who found that the IDR program was seriously mismanaged by lending departments. While the IDR plans to limit borrowers’ monthly bills and discharge borrower debt after 20 to 25 years of qualifying payments, very few borrowers are able to obtain the loan forgiveness that allowed them. been promised.
For decades, student loan servicers mismanaged IDR plans, including failing to properly count eligible IDR payments, including $0 payments, and failing to accurately track borrowers’ progress toward cancellation. . 48% of IDR borrowers are eligible for a $0 qualifying payment because they earn less than 150% of the federal poverty level. So not counting these $0 payments hits the lowest-income borrowers the most.
Senators Warren, Brown and Durbin are asking the CFPB to investigate serious mismanagement of the IDR program by student loan servicers, and they are asking the ED to pass an IDR waiver that would retroactively count every month since the borrowers began repayment, including periods of deferment, forbearance and default, as months qualified toward debt cancellation.