What’s Going on with Income Driven Repayment and Student Loans?
Senators call for investigation amid reports of mismanagement
Following a report that student loan servicers are mismanaging the Income Driven Repayment (IDR) program for federal student loans — resulting in borrowers paying much more than they should — a group of U.S. Senators sent a letter to the Consumer Financial Protection Bureau (CFPB) calling for an investigation into loan servicers.
The move comes after the CFPB fined loan servicer Edfinancial for misleading borrowers.
Senators Sherrod Brown of Ohio, Dick Durbing of Illinois, and Elizabeth Warren of Massachusetts issued the letter in which they decried the mismanagement of this key program designed to help borrowers manage repayment of student loans.
In the letter, the Senators said:
A recent NPR investigative report found the IDR program is riddled with problems and mismanagement, even worse than the public previously understood, resulting in millions of borrowers becoming unable to obtain debt cancellation. According to the report, loan servicers have severely mismanaged IDR plans for decades, including by failing to properly count qualifying IDR payments and not accurately tracking borrowers’ progress towards cancellation. The report…
