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23 Senators Demand Investigation Into Mismanagement Of Student Loan Program


Nearly two-dozen U.S. senators are calling on Kathleen Kraninger, director of the Consumer Financial Protection Bureau, to investigate a loan servicer called the Pennsylvania Higher Education Assistance Agency.

Nearly two-dozen U.S. senators are calling on Kathleen Kraninger, director of the Consumer Financial Protection Bureau, to investigate a loan servicer called the Pennsylvania Higher Education Assistance Agency.

Alex Wong, Getty Images

Twenty-three U.S. senators are calling on the nation’s top consumer protection agency to investigate a loan servicer for its role in a troubled student loan forgiveness program. The program is designed to help public service workers like teachers and police officers.

The loan servicer, the Pennsylvania Higher Education Assistance Agency, better known as FedLoan and PHEAA, is one of the entities that handles the Public Service Loan Forgiveness Program.

“For several years now, government watchdogs have repeatedly found that PHEAA’s missteps, errors, and mismanagement of the PSLF program caused public service workers to be denied the loan forgiveness that they had earned,” the senators said in a letter to Kathleen Kraninger, director of the Consumer Financial Protection Bureau.

The senators, all Democrats, include Sherrod Brown, Amy Klobuchar, Bernie Sanders and Elizabeth Warren. The letter was obtained by NPR.

“Public service workers and their families need immediate protection from ongoing harm,” the senators wrote. “We therefore ask that the CFPB do its job and immediately open an enforcement investigation into PHEAA’s servicing practices, management of the PSLF program, and other potential violations of federal consumer financial laws.”

The CFPB and PHEAA did not return immediate requests for comment.

The Public Service Loan Forgiveness Program aims to help police, military service members, teachers, people who work at nonprofits and others. If they make qualifying payments for 10 years, the program promises to forgive the remainder of their student loan debt.

But, as NPR has reported, the program is rejecting 99% of people who think they have done that when they apply to get their loans forgiven.

In their letter, the senators cited a 2017 report by the CFPB’s student loan ombudsman. The report found that public service workers had been denied for loan forgiveness because of PHEAA’s “flawed payment processing, botched paperwork and inaccurate information,” the senators wrote.

And a 2018 Government Accountability Office report “found that public service workers had improperly been denied loan forgiveness because of PHEAA’ s inability to properly account for qualifying payments and reliance on inaccurate information,” the senators wrote.

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