U.S. Sens. Sherrod Brown (D-OH), Dick Durbin (D-IL), and Elizabeth Warren (D-MA) recently forwarded correspondence to the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education (ED), seeking a review of the income-driven repayment (IDR) program.
The senators said the request stems from an NPR investigative report alleging the IDR program is riddled with problems and mismanagement.
“A recent NPR report found that student loan servicers mismanaged the income-driven repayment (IDR) program, a program designed to help low-income borrowers, resulting in significant harm for borrowers with the lowest incomes,” the senators wrote to CFPB Director Rohit Chopra. “The loan servicers’ failure to responsibly manage IDR plans is evidenced by the low rate of cancellation under the IDR – out of 4.4 million eligible borrowers, recent reports indicate that only 32 borrowers have ever had their student loans canceled through IDR.”
Congress created IDR in 1992 to ensure low-income borrowers would not be burdened by federal student loan debt payments or trapped in perpetual repayment.
“It is obvious that IDR plans, as they currently stand, are not fulfilling their original promise that federal student debt should be affordable and not a lifetime debt sentence, particularly for low-income students,” the senators wrote to ED Secretary Miguel Cardona. “ED has a responsibility to ensure borrowers do not bear the consequences of the failures of IDR implementation and oversight and that ICR delivers on its promise of giving borrowers a light at the end of the tunnel.”
Brown, Durbin, and Warren successfully urged President Joe Biden to extend the pause on federally-held student loan payments earlier this month, advocating efforts toward meaningful student debt cancellation.
“Borrowers who have been in repayment for more than 20 years have been relying on the program’s promise of debt cancellation,” the senators concluded. “As the Department of Education works to rectify the harms already done to borrowers, we urge the CFPB to investigate the report’s findings to ensure servicers implement IDR with fidelity going forward.”