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Elizabeth Warren calls student loan service for abusive practices amid non-payment of student loan

 


Sen. Elizabeth Warren is calling this student loan service for abusive practices in the midst of student loan default.

Here’s what you need to know.

Student loans

In a fierce paper for Maximus student loan service, Warren (D-MA) seeks assurance that Maximus will protect student loan borrowers when Maximus receives the Navients portfolio of 5.6 million student loans when Navient is expected to suspend federal student loan service until the end of year. Here is what inside the letter:

Student loan facilitation is coming to an end soon

Warren is deeply concerned that the Biden administration will not extend student loan relief from the Covid-19 pandemic beyond January 31, 2022. This means that student loan borrowers will resume repaying federal student loan starting February 1, 2022. Student loan payments and student loan interest rates will return to normal after 22 months of temporary student loan forgiveness. (Here are 3 ways to get a lower student loan payment). Warren has expressed concern that millions of student loan borrowers will not repay their student loans if President Joe Biden does not extend student loan facilitation until the end of next year. Despite its efforts to extend the student loan limit, the U.S. Department of Education has said there will be no extension of this student loan facilitation. At the same time, Warren has been the leading lawyer calling for large-scale student loan forgiveness for borrowers, including up to $ 50,000 student loan cancellation. (Here’s how to apply for limited student loan forgiveness).


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Student loans: complete a history of student loan abuse

As this student loan relief is coming to an end, Warren wants to end a history of student loan abuse. Warren specifically called Maximus, including:

  • Over the past 8 years, Maximus has received more than $ 800 million from the U.S. Department of Education to manage student loans in absentia; (How to apply for a student loan waiver during the Biden administration)
  • Warren says Maximus’s story may raise concerns that student loan borrowers may have poor services and abusive practices;
  • Warren alleges that Maximus mismanaged student loan defaults, which resulted in thousands of student loan borrowers who were qualified to protect the borrower from being repaid improperly as their loan was in arrears, and repayments of their taxes were inappropriately seized or their salaries were decorated;
  • Maximus has never managed pre-determined student loans, and Warren is concerned about Maximus’ ability to meet a higher level of responsibility; AND
  • Maximus has a potential conflict of interest as a servant for all student loans currently outstanding, and its new role as a servant for the 5.6 million borrowers currently repaying the student loan.

Navient will no longer serve your federal student loans

Navient, which serves $ 300 billion in student loans to 12 million student loan borrowers, announced last month that Navient will leave its federal student loan service with the U.S. Department of Education. (Here is what this means for your student loans). Navient announced the surprise move within days after Congress avoided a major government shutdown and signed a final agreement to transfer its federal student loan service to U.S. Department of Education’s student loan accounts to Maximus. (That’s why Navient left your student loans). Navient was likely to face increased regulatory oversight by the U.S. Department of Education, Congress, state attorneys general, and the Bureau of Consumer Financial Protection (CFPB). Warren wants to ensure that Maximus, whom Warren says has a controlled history of student loan service, will now serve $ 449 billion in student loans to 13 million student loan borrowers. Given this added responsibility, Warren wants to ensure that Maximus is transparent, responds to borrower complaints, and provides accurate and timely information to student loan borrowers. (If you want student loan forgiveness, follow these 5 steps).


What does this mean for your student loans

If Navient is your current student loan service for federal student loans, Maximus is likely to become your new federal student loan service. The U.S. Department of Education will contact you in writing regarding this transition. You should not take any action. Your student loan terms, including your interest rate, student loan repayment plan and student loan terms will remain the same. However, you will want to update your automatic payment information once the transfer is complete, as you will make student loan payments to Maximus if Maximus becomes your new student loan service. That said, you should continue to make student loan payments for Navient until the Department of Education notifies you otherwise. Importantly, this is only for federal student loans, and private loans will not be affected.

Completing a temporary student loan forgiveness means that you should have a game plan for repaying the student loan. Make sure you understand all your options now. Here are some popular ways to repay student loans:


Student loan: Related reading

If you want to forgive a student loan, follow these 5 steps

How to apply for limited student loan forgiveness

The Department of Education will cancel $ 2 billion in student loans

Here’s who qualifies for student loan forgiveness now

Sources

1/ https://Google.com/

2/ https://www.forbes.com/sites/zackfriedman/2021/11/24/elizabeth-warren-calls-out-student-loan-servicer-for-abusive-practices-amid-looming-student-loan-default/

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