Foxx, Cassidy Press ED for Plan on Resuming Student Loan Repayment
By Maria Carrasco, NASFAA Staff Reporter
Rep. Virginia Foxx (R-N.C.), chair of the House Committee on Education and the Workforce, and Sen. Bill Cassidy (R-La.), ranking member of the Senate Committee on Health, Education, Labor, and Pensions (HELP), sent a letter on Tuesday to Education Secretary Miguel Cardona demanding details of how the Department of Education (ED) will return borrowers to repayment this fall.
The student loan repayment pause is set to end soon, with interest on federal student loans resuming on Sept. 1, 2023, and payments due in October. According to the lawmakers, with roughly 43 million borrowers resuming repayment, the department has not shown any “evidence of any plan of action” and “has yet to provide any tangible proof of any plan for the return to repayment.”
“The Department has been on notice for nearly two and a half years that it would need to develop a plan for a smooth transition to repayment,” the lawmakers wrote. Congressional education committees, they continued, “remain concerned that the Department is unprepared for the return to payment of federal student loans.”
Specifically, Foxx and Cassidy are requesting that ED provide any memos, reports, and information with the strategy for restarting repayment, along with the most recent version of the “student loan servicer playbook,” no later than two weeks after receiving the letter. Additionally, the lawmakers demand ED provide an in-person briefing to the committees on the strategy to return borrowers to repayment no later than July 20.
The lawmakers said their concerns stemmed from ED’s “mismanagement of appropriated funds” to other initiatives, such as the student loan cancellation plan, the “Fresh Start” initiative, and others.
“For the last several years, rather than being good stewards of taxpayer funds, FSA has been redirecting resources appropriated by Congress to a wide range of unauthorized and fiscally irresponsible initiatives, including student loan forgiveness, a new income-driven repayment (IDR) proposed rule, the ‘Fresh Start’ initiative, the IDR one-time adjustment waiver, and the Limited Public Service Loan Forgiveness waiver and application,” the lawmakers wrote.
The lawmakers stressed the urgency for ED to prepare servicers for repayment and communicate with borrowers for a smooth transition. Additionally, the lawmakers are concerned with recent reports borrowers are “being encouraged not to make payments on their student loans” once repayment resumes.
“As you are aware, all student loans include terms whereby borrowers agree to repay their student loans,” the lawmakers wrote. “We expect you and senior officers of the Department to exercise leadership in countering such efforts wherever and whenever they occur, particularly since nonpayment will lead to negative financial consequences for borrowers and barriers to future financial opportunities.”
Publication Date: 6/29/2023
Darren C | 6/29/2023 8:51:46 AM
I am as well waiting for some official details and a comprehensive plan to be released on how this unprecedented 3 plus year payment pause will be addressed. We've been lied to so many times about when it will end and how repayment will be handled, at this point, it's hard to even trust this Oct. 1st date. Since the beginning this situation has been handled irresponsibility and without accountability. The amount of students totally disconnected in their minds from repayment and responsibility for their education costs will be astronomical. I just hope ED steps up soon with a serious investment in the borrowers they put in this dreadful situation. The damage from this payment pause will likely be exhibited for years to come.
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