Brown, Warren, Colleagues Call for Exiting Servicers’ Plans to Correct Errors and Ensure a Smooth Transition for Nearly 16 Million Student Borrowers


WASHINGTON, D.C. — November 4, 2021 – United States Senators Sherrod Brown (D-OH) and Elizabeth Warren (D-MA), alongside Senators Edward J. Markey (D-MA), Chris Van Hollen (D-MD), Richard Blumenthal (D-CT), Robert Menendez (D- NJ), and Tina Smith (D-MN), sent letters to the heads of Pennsylvania Higher Education Assistance Agency (PHEAA), Granite State Management & Resources (Granite State), and the Navient Corporation (Navient) calling on them to correct past errors with borrowers’ accounts and address growing concerns over their preparedness to transfer millions of borrowers to new servicers. The letters were sent with only 90 days before student loan payments — which have been on pause for federal borrowers since March 2020 — are set to resume on January 31, 2022.

In recent months, PHEAA, Granite State, and Navient have all announced that they are exiting their contracts with the federal government or are transferring their contract to a new operator, meaning that roughly 16 million borrowers will be transferred to a new servicer. With limited time before student loan payments are scheduled to resume, the senators are calling on the loan servicers to provide concrete plans to ensure account errors are corrected and to maintain adequate staffing and documentation to protect borrowers throughout the transition.

“Student loan servicers have a long history of misleading borrowers about available options, mismanaging programs, and cheating borrowers out of protections developed to help them pay back their student loans. In previous transfers, failures to transfer complete and accurate information left hundreds of thousands of borrowers with account problems that continue to plague the federal loan portfolio today,” wrote the senators. 

Especially during transition periods, loan servicers have a history of making mistakes that can cause borrowers to lose months of qualifying payments toward forgiveness in the Public Service Loan Forgiveness and Income-Driven Repayment programs, deal with incorrect loan balances, or face penalties due to incorrectly processed payments. The senators added:

“This restart is expected to be an unprecedented logistical challenge for borrowers, the Department of Education, and loan servicers. After having their payment and interest suspended for nearly two years, more than a third of all federal borrowers will also be returning to repayment with a new servicer, which has the potential to lead to confusion, delays, and an unusually high need for customer service support.”

The senators asked for responses to their concerns by November 17, 2021.

Copies of the letters can be found here: Letter to PHEAA | Letter to Granite | Letter to Navient