U.S. lawmakers press Education Department over mounting student-loan servicing failures

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Over 30 Democratic lawmakers, led by Sen. Elizabeth Warren and Rep. Ayanna Pressley, sent a letter urging Education Secretary Linda McMahon to address systemic student-loan servicing errors and improper billing.
Eight state student-loan ombudsmen reported widespread failures in income-driven repayment and forgiveness tracking, with some borrowers making payments that did not count toward relief.
Democratic control of Congress is expected to intensify oversight of the Education Department following Trump administration reforms, amid ongoing lawsuits and concerns over reduced servicer monitoring and staffing cuts.

Lawmakers seek response on servicing errors

As first reported by Business Insider, a group of more than 30 Democratic lawmakers led by Sen. Elizabeth Warren and Rep. Ayanna Pressley has sent a letter to Education Secretary Linda McMahon over borrower problems tied to repayment administration.

The lawmakers say loan servicers are incorrectly billing some borrowers for higher payments than they owe, improperly adding interest to balances, and delaying the processing of relief through income-driven repayment, or IDR, plans. They also urge the department to respond to recommendations from eight state student-loan ombudsmen, who called for stronger complaint resolution and better tracking of progress toward loan forgiveness.

The ombudsmen described what they called systemic failures in the administration of IDR plans and loan-forgiveness programs. They cited one borrower whose forgiveness tracker showed payments that ultimately did not count, leading her to believe she remained on course for relief while spending thousands of dollars on payments that did not advance forgiveness.

Oversight fight expands after election shift

The push adds to scrutiny of the Trump administration's student-loan overhaul, which took effect on July 1 and is intended, according to the administration, to simplify repayment and curb excessive borrowing. Borrowers have continued to report errors and confusion over account status since the changes began, even as the department says it fixes mistakes as they arise.

Some of those disputes are already moving into court. Most recently, the American Federation of Teachers filed a lawsuit against the Education Department over stalled debt relief for borrowers seeking Public Service Loan Forgiveness.

Lawmakers argue the problems predate the current repayment changes and point to deeper operational weaknesses at the department. They cite staffing cuts, reduced oversight of servicers, and a Government Accountability Office finding that the department stopped monitoring servicers for accuracy and call quality after staff reductions.

The latest pressure campaign also comes after Democrats won control of both chambers of Congress in the midterm elections. Democratic lawmakers have indicated they plan to increase oversight of the student-loan industry and challenge the administration's efforts to dismantle the Department of Education.

Our earlier report on Republicans’ surge in midterm election advertising spending detailed how the party poured hundreds of millions of dollars into Senate and House races as polling tightened, even expanding buys into contests once considered safe. It also noted that high fuel costs and broader affordability pressures were shaping voter sentiment and forcing strategic reallocations of campaign resources in key battlegrounds.

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