"Changes are coming to student-loan repayment, and Democratic lawmakers are warning that it could lead to costly servicing mistakes for borrowers. On Sunday night, Democratic Sens. Elizabeth Warren, Ed Markey, Jeff Merkley, Richard Blumenthal, Cory Booker, and Chris Van Hollen sent letters, exclusively viewed by Business Insider, to all five federal student-loan servicers regarding their abilities to assist borrowers amid major changes to repayment."
"The lawmakers wrote in their letters to the federal servicers that, given the slew of changes, it's imperative that borrowers can receive help from their servicers, along with accurate paperwork processing. "Student loan servicers' administrative errors have significant financial consequences for borrowers, including delayed rent payments, loss of mortgage eligibility, postponed retirement contributions, and even risk of homelessness," the lawmakers wrote. "Borrowers pay the price for servicers' neglect and incompetence.""
Major changes to student-loan repayment are being implemented, including new repayment plans and borrowing caps created by recent federal spending legislation. Several Democratic senators sent letters to the five federal student-loan servicers expressing concern about servicers' ability to assist borrowers and process paperwork accurately amid the changes. Servicers are coordinating with the Department of Education to roll out the new rules while collections on defaulted loans resumed after a five-year pause. Lawmakers warned that servicer administrative errors can cause delayed rent payments, loss of mortgage eligibility, postponed retirement contributions, and even risk of homelessness for affected borrowers.
Read at Business Insider
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