Student-loan companies could harm borrowers with repayment: Dems

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Student-loan companies are putting borrowers at 'heightened risk' of harm if they fail to prepare for payments to resume, 6 Democratic lawmakers say

. That means that while a president can implement a pause for a future emergency, Biden cannot do so again as a result of COVID-19.

With most borrowers not required to make payments for over three years, the group of Democratic lawmakers want to be sure companies are prepared for this"unprecedented event with a heightened risk of borrower harm" — especiallyThey said that"our previous correspondence with student loan servicers indicated that they had had little engagement with borrowers throughout the pandemic and were not prepared to support borrowers once payments resumed.

"For instance, in response to our July and December 2021 letters, only one servicer out of six indicated that they had conducted multiple rounds of outreach to borrowers; only half of the servicers shared any information on borrower response rates, and those that did share this information had not been in touch with the majority of new borrowers," they continued.

The lawmakers asked the CEOs to respond to a serious of questions by August 1 regarding their preparations to resume payments, including how many borrowers the companies have contacted since June, how the companies are training their customer service staff, what the average wait time is for borrowers seeking help from the company, and how the companies are determining borrowers' payments plans for October.

 

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