Senator Elizabeth Warren (D-MA) toast two student loan officers and greeted experts on student loan audience Tuesday before sitting down with Yahoo Finance to describe its argument for President Biden to unilaterally write off $ 50,000 in federally backed student loans for tens of millions of Americans.
“Overall, during this hearing, it was perfectly clear [that] we have a broken student loan system, ”Warren, chair of the Senate Banking, Housing and Urban Affairs Committee on Economic Policy Subcommittee, told Yahoo Finance Presents (video above).
“We have these middlemen, these student loan debt management officers who were with us today, who just can’t seem to cope,” she said, adding that the issues with the officers are no longer there. “Just one more example of the United States government’s handling of a massive student loan program that really puts a burden on tens of millions of people in this country. It just doesn’t make sense.”
Warren said that testimony and responses provided by two of the student loan managers who attended the hearing, Navient and the Pennsylvania Higher Education Assistance Agency (PHEAA), reinforced his position on the role of managers in creating crisis.
“The federal government should absolutely fire Navient,” Warren told Jack Remondi, the company’s CEO, at the hearing. “And because this happened under your direction, Navient should fire you.” Her too called the US government to stop working with the PHEAA.
“Sounds pretty straightforward to me about it,” Warren told Yahoo Finance. “These student debt officers, they make a lot of money to improve their results, but not to help students who are really having trouble trying to pay off their loans.”
In response to Warren’s statements, ED spokeswoman Kelly Leon told Yahoo Finance that the agency is aware of the burden of student loans and realizes that it is “extremely important that we look into depth all of our borrowing and repayment system, including the companies hired. to help us.”
Navient (NAVI) offers federally guaranteed loans for approximately 5.6 million borrowers and holds approximately $ 58 billion in Federal loans for family education. The PHEAA offers federal loans to borrowers who are on track for the delivery of civil service loans.
“As today’s audience focuses on the problems of today’s loan program, it is important to recognize the good the program is doing,” said Remondi de Navient. in his testimony. “We see evidence – day in and day out – of people who have successfully achieved higher education and upward economic mobility as a result of federal student loan aid.”
“We have these middlemen, these student loan debt management officers who were with us today, who just can’t seem to hold on,” Warren told Yahoo Finance. “They are pursued over and over again. And yet there is no accountability.” (Navient has set up a page to respond to the allegations of the various lawsuits).
“Call for the immediate cancellation of $ 50,000 in student loan debt”
Warren explained that all of the questions raised at Tuesday’s hearing are the reasons why “Senator Schumer and I are calling for the immediate cancellation of $ 50,000 in student loan debt, which President Biden could do tonight. “.
Warren and Senate Majority Leader Chuck Schumer (D-NY) have both repeatedly urged a skeptical Biden to write off $ 50,000 in student loan debt held by the federal government via executive action (as opposed to the legislation passed by Congress).
White House Chief of Staff Ron Klain recently says Politico that the president asked the secretary of education Miguel Cardona to “prepare a note on the legal authority of the president” before any decision.
ED data recently sent to Warren’s office showed that a $ 50,000 cancellation would wipe out the full debt burden of over 36 million student loan borrowers, including 9.4 million borrowers currently in debt. fault. (Other borrowers may be at risk of default after a payment break and the end of the moratorium on debt collection on qualifying loans after September 2021.)
“President Biden needs to hear from people,” Warren said. “Senator Schumer and I are doing our best … But we need to put more wind in the sails, we need to hear from more borrowers and their families. We could do it. And we are right at this point in time. . “