“I’m so worried that people are being left behind”


US President Joe Biden, flanked by Education Secretary Miguel CardonaAlex Wong/Getty Images

  • A student loan company employee has expressed concern about Biden’s lack of debt relief advice.

  • She said FFEL borrowers in particular are confused about whether they qualify.

  • The Biden administration has maintained that it is ready to implement this general relief.

Student loan companies are tasked with implementing President Joe Biden’s student loan forgiveness plan – but an employee at one said there was a lack of guidance on exactly how to do this.

Before Biden’s August announcement $10,000 to $20,000 in debt forgiveness for federal borrowers earning less than $125,000, many advocates and lawmakers were expressing concerns about exactly how this relief would be implemented. Lawmakers on both sides of the aisle have demanded additional information from the Education Department on its readiness to provide general aid, and from the loan officers themselves. warned department that it would be difficult to transparently implement loan forgiveness on such short notice.

An employee of a small student loan company in Iowa told Insider that since Biden’s announcement, the level of confusion has been high — both for borrowers and for services.

“There is a complete lack of guidance from the Department for Education on what to advise borrowers,” said the worker, who asked to remain anonymous but whose identity is known to Insider. . “There’s still so much information that borrowers need, but this relief is on a deadline and I’m so worried people will be left behind.”

The worker specifically assists borrowers under the Federal Family Education Loans (FFEL) program, who have loans held by businesses and not eligible for federal relief. Currently, the Department of Education is advise these borrowers to consolidate their loans into direct federal loans so that they can qualify for a forgiveness. He said on his FAQ that it is “assesswhether to extend eligibility to these borrowers without requiring consolidation.

This advice is confusing for many FFEL borrowers who call and wonder if they qualify, the worker said. She said the most she can tell borrowers at this time is simply what is listed on the ministry’s website. Consolidation call volume has surged, she said, because borrowers “are so confused about the website” and the types of loans they hold.

“There’s only one place borrowers can go to get consolidation,” the worker said. “I know in the past when the department was behind on the consolidation forms, it took months to get them through, and that’s what really worries me. Are they going to accept these pardon requests if the Consolidation doesn’t happen until December 31st? Can they apply in advance? Will they take someone who applied for consolidation in advance?”

The CEO of Navient — a major student loan company that holds some FFEL loans — Jack Remondi also raised concerns about borrowers having to consolidate in order to qualify for Biden’s relief, saying at Barclay’s global financial services conference last week that it would be “big enough business” for the education department to process millions of consolidation requests.

In response to the worker’s concerns, a spokesperson for the Ministry of Education pointed Insider to the FFEL tips already on its website and had no further details to provide.

“All we can say is that we don’t know anything yet”

Major student loan companies have also had to deal with borrower confusion. Nelnet, for example, Told borrowers to “wait on the call” as he had no additional details to share on Biden’s debt relief beyond what had already been announced. And the worker said the lack of information she could share with borrowers was “frustrating”.

“We get a ton of people calling and all we can say is we don’t know anything yet,” she said.

The Student Loan Servicing Alliance – a group that represents federal services – wrote on Twitter that “we all look forward to @usegov share specific details and next steps regarding the federal government #studentloanforgiveness.”

There is also a lot at stake for borrowers before the end of the year. Not only will the majority of them need to apply for student loan forgiveness when the application becomes active beginning of October — those who are civil servants have a little over a month to take advantage of extended benefits through the Civil Service Loan Forgiveness Program which expires on October 31, while preparing to resume payments on January 1, 2023.

“I’ve never seen so much change happen to our student loan system in four months. It’s unprecedented,” said Bryce McKibben, senior director of policy and advocacy at the Hope Center for College, Community and Justice. from Temple University, Told NBC News. “We really need a massive public service announcement campaign to get it right.”

Despite concerns from services and advocates, the Biden administration maintains that it has the ability to execute all of these actions smoothly. White House press secretary Karine Jean-Pierre said at a recent press briefing that Biden has already passed targeted loan forgiveness – for borrowers defrauded by for-profit schools, for example – and it can be redone.

“It’s not the first time. We’ve done it before,” she said. “There is precedent here.”

Do you have a story to share on student debt? Contact Ayelet Sheffey at [email protected]

Read the original article at Business Intern


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