Given that this settlement will not fully compensate or remedy the harms inflicted by Navient on student borrowers, and in light of ED's repeated failures to address Navient's predatory practices, ED has the responsibility to use its tools to make things right for Navient's victims, and the ability to do so. For example, ED should consider taking a page from its recent decision to provide a limited Public Service Loan Forgiveness (PSLF) waiver that will allow eligible borrowers' prior payments to count toward loan forgiveness. This PSLF waiver will provide relief to more than 500,000 public servants across the country.
The Navient settlement comes at a critical time. While ED made the right decision to extend the student loan payment pause through , about half of all federal student borrowers are at risk of falling behind on their loans once monthly payments resume. It is urgent that ED take action to redress Navient's victims for the full scope of the https://getbadcreditloan.com/ financial injury they experienced. To ensure the Department does so on a timely basis, we are seeking information on ED's plans to make these borrowers whole. We ask that you provide answers to the following questions no later than :
1. How many will not receive loan forgiveness? How many will not receive restitution? Please provide state-level estimates of the number and percent of all borrowers who will not receive forgiveness and the number and percent who will not receive restitution.
2. What actions will ED take to provide relief to student loan borrowers who were harmed by Navient? Please describe your plans in detail.
- What actions will ED take to provide relief to borrowers who are not eligible to receive forgiveness or restitution from the Navient settlement?
- For borrowers who are eligible for loan forgiveness or restitution under the Navient settlement, what actions will ED take to ensure that they are aware of and take advantage of this relief? Will ED take any actions to supplement the relief they receive?
3. According to the details of the settlement, borrowers who are eligible for restitution will be notified with a postcard in the mail from the settlement administration later this spring to be followed by an automatic payment. What steps will ED take to ensure that all eligible borrowers are notified and receive their payment?
ED can build off this decision and create a path to loan forgiveness for millions of other borrowers cheated by Navient by creating a similar income-driven repayment waiver
4. The settlement also requires Navient to notify Federal Family Education Loan borrowers about ED's PSLF limited waiver opportunity, which offers millions of public service workers the chance to have previously non-qualifying repayment periods counted toward loan forgiveness. What steps will ED take to ensure that Navient complies with this requirement?
5. The settlement includes conduct reforms to ensure that Navient improves its servicing and debt collection operations going forward, including by explaining the benefits of income-driven repayment plans to its customers and offering to estimate income- driven payment amounts before placing borrowers into optional forbearances; making additional attempts to notify borrowers of the need to annually recertify income and family size information under their income-driven repayment plans; and using default payment allocation methods that are favorable to borrowers. What steps will ED take to ensure that Navient is meeting each of these conduct reforms?
- In , Senator Van Hollen joined Senators Warren and Raphael Warnock (D-Ga.) and a group of colleagues in a letter to Secretary Cardona urging the Department of Education to take swift action to automatically remove all federally-held student loan borrowers from default.
To qualify for restitution, borrowers must have at least one loan eligible for income- driven repayment, must have been placed in a certain type of long-term forbearance, must have resided in a restitution-participating state as of , and meet several other eligibility requirements
For the roughly 350,000 federal borrowers who are eligible for restitution, the average restitution payment will be $260 a pittance compared to the significant additional debt that many incurred as a result of Navient steering them into unnecessary months and years of forbearance. According to a GAO report, a typical borrower with $30,000 in loans who spends the first three years of repayment in forbearance would pay an additional $6,742 in interest, 17 percent more than they otherwise would.