A GOP senator and representative warn that the resumption of loan payments will lead to economic fallout and that federal officials are 'ill-prepared.'
expressed concern that the Department of Education is"ill-prepared" to restart student loan payments. The two GOP lawmakers criticized the department's vagueness in its earlier response to an April letter sent by Republicans, calling its reply"devoid of evidence of any plan of action."
"The Department has yet to provide any tangible proof of any plan for the return to repayment," Foxx and Cassidy wrote in their joint letter.Student loan borrowers stage a May 9 sit-in at the office of Speaker of the House Kevin McCarthy to urge him to stop trying to block student debt cancellation.Securities, wrote in a recent note that the bank is expecting delinquency levels to return to where they were before the pandemic.
Data from the Consumer Financial Protection Bureau shows that more than 1 in 13 student loan borrowers are behind in their payment obligations and that 1 in 5 faces risk factors suggesting they will struggle once payments resume. The bureau also said that several large servicers have ended their contracts with the Department of Education in the last three and a half years. This means that 44 percent of borrowers will be working with a company different from the one they used before the pandemic.
"For some borrowers, this process may be smooth with few changes. But other borrowers may need to create new logins with their new services, re-enroll in autopay, or update their payment information," the bureau wrote in a June 7 blog post. In their letter Foxx and Cassidy also expressed concern about borrowers flouting requirements to pay back their loans after the pause ends. They cited
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