NAICU Washington Update

Senate Examines Student Loan Servicers

May 06, 2022

The Senate Committee on Banking, Housing, and Urban Affairs held a hearing to examine the impact student loan servicers are having on workers carrying student debt.  This was the second hearing regarding student loan debt the committee has held during this congress. 

Earlier this week, prior to the hearing, the committee held a listening session to hear directly from workers about how they have been impacted by student loan debt. During the hearing, Chairman Sherrod Brown (D-OH) shared stories about borrowers who have struggled in repaying their loans due to failures of the repayment plans and student loan servicers. To underscore these points, he highlighted major problems with the Public Service Loan Forgiveness (PSLF) program and noted that only 32 borrowers have successfully received forgiveness from the income-driven repayment (IDR) plans. He emphasized that the increase in student loan debt has gotten out of control and that it is time for the Biden Administration to forgive a meaningful amount of student loan debt.  

Ranking Member Pat Toomey (R-PA) agreed that rising student loan debt is an issue but took a different approach. He emphasized that student loans are loans and not grants. Student loan debt is primarily owed by wealthy people and graduate students and is voluntarily taken on.  He sees loan forgiveness as unfair to every American who did not attend college or is sacrificing to pay their loans back. It is never acceptable for taxpayers to shoulder the burden of paying for college when the cost of college is the problem. He also believes there is a direct correlation between tuition increases and the ability of students to take on more loans. 

The Republican and Democratic members on the committee echoed the sentiments of their respective leaders on the committee.

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