Press Release
☷Biden Harris Administration Takes Additional Action to Hold Student Loan Servicers Accountable for Failing to Meet Contractual Obligations
U.S. Department of Education ( By Press Release office)
Jan 07,2024
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The Biden - Harris Administration announced today that it ' s holding back payments to three student loan servicers as part of the Department of Education ' s ongoing efforts to protect borrowers and hold servicers accountable . Aidvantage , EdFinancial , and Nelnet all failed to send timely billing statements to a total of 758 , 000 borrowers in their first month of repayment . As a result , the Department is withholding $2 million from Aidvantage , $161 , 000 from EdFinancial , and $13 , 000 from Nelnet . Secretary of Education Miguel Cardona stated that this administration will not let servicers off the hook for mistakes that harm borrowers . The Department has instructed each servicer to put affected borrowers in administrative forbearance until the issues are resolved , meaning they won ' t have to make payments during this time and any interest accrued will be zeroed out . This forbearance will also count towards loan forgiveness programs . The Department ' s actions aim to protect borrowers and hold servicers accountable . This is not the first time the Department has taken action , as it previously withheld $7 . 2 million from MOHELA for similar issues . The Federal Student Aid Chief Operating Officer , Rich Cordray , emphasized the commitment to providing a smooth repayment experience for borrowers and ensuring servicers meet their obligations . The Department will continue to closely monitor servicers and take corrective action when necessary . The Department will keep an eye on how well servicers are doing their job and making sure they fulfill their obligations to the Department and borrowers by providing accurate and timely service . If a servicer doesn ' t meet these obligations , the Department might take further action . Also , to make sure borrowers don ' t get punished for late or missed payments during the switch to repayment , the Department recently sent a letter to credit reporting agencies and credit scoring companies to remind them that borrowers ' current payment behavior doesn ' t necessarily mean they can ' t or won ' t make payments .
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