Department of Education 'unprepared' for transition to student loan repayment, leaders warn

Education and the Workforce Committee Chairwoman Virginia Foxx and Senate Health, Education, Labor, and Pensions Committee Ranking Member Bill Cassidy, M.D. have jointly sent a letter to Department of Education (DOEd) Secretary Miguel Cardona, expressing concerns about the DOEd’s inadequate planning and ineffective communication of guidance regarding the transition to student loan repayment.

“We write today because we are concerned that you are ill prepared to return millions of student loan borrowers to repayment,” the letter leads. 

Student loan repayments were first paused via an emergency declaration by then-President Donald Trump in March 2020 to assist student loan borrowers during the COVID-19 pandemic.  

But the time for skipping payments is ending soon. 

On June 3, President Biden signed the Fiscal Responsibility Act of 2023, setting the repayment date to begin 60 days after June 30.

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Expressing concern, Rep. Dr. Foxx and Sen. Cassidy highlight the potential shock resulting from the transition to repayment plans, which, as the lawmakers explain, will be further exacerbated by the DOEd’s failure to establish a well-prepared and seamless repayment transition, despite having been aware of this requirement for over two years.

”The [DOEd] has been on notice for nearly two and a half years that it would need to develop a plan for a smooth transition to repayment,” the lawmakers write, remaining “concerned that the [DOEd] is unprepared for the return to payment of federal student loans.”

While the DOEd claims to have effectively communicated its plan, Rep. Dr. Foxx and Sen. Cassidy emphasize the lack of specific answers provided by the DOEd regarding how it intends to assist borrowers and loan servicers during the repayment transition:

On May 15, 2023, Assistant Secretary for Legislation and Congressional Affairs Gwen Graham responded on your behalf to an April 25, 2023, joint letter from Chairwoman Foxx and Education and Workforce Subcommittee on Higher Education and Workforce Development Chairman Burgess Owens. In her response, Assistant Secretary Graham stated, ‘the [DOEd] is fully committed to supporting student loan borrowers as they return to repayment later this year and will keep doing everything in its power to better serve them.’ We appreciate that the [DOEd] is ‘fully committed’ to this very important initiative; however, the vagueness of being ‘committed’ speaks loudly; it is devoid of evidence of any plan of action.

The joint letter also lists the DOEd’s inability to effectively communicate guidance, highlighting that Secretary Miguel has not proven that he or any official from the DOEd has spoken with loan servicers.  

“After eight extensions of the student loan payment pause, a recently enacted federal law requires 43 million borrowers to return to repayment in just over two months,” Rep. Dr. Foxx told Campus Reform. 

She continued, “Yet the [DOEd] has not demonstrated to Congress it has an action plan to handle this transition effectively or efficiently. The success of this return to repayment hinges on Secretary Cardona stepping up to the plate and giving borrowers and servicers clear guidance. Because the Secretary has yet to do that, we are demanding a briefing from him to explain the Department’s plans.” 

“One way or another, we will compel this administration to do its job,” Rep. Dr. Foxx concluded. 

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The joint letter, however, is not the only source showcasing the DOEd’s poor leadership. 

During a May hearing, Secretary Cardona could not answer questions about his department’s handling of public record requests nor provide a consistent definition of sexual harassment. 

🚨 @RepHouchin: “Do you believe it constitutes sexual harassment to force women to undress in front of biological males?

Cardona: ”I do believe forcing women to undress in front of biological males is a concern.” pic.twitter.com/LBPL12cucy

— House Committee on Education & the Workforce (@EdWorkforceCmte) May 17, 2023

Additionally, Rep. Dr. Foxx and Workforce Development Subcommittee Chairman Rep. Burgess Owens jointly wrote a letter on June 20 blasting the DOEd’s Gainful Employment regulation, calling it hypocritical. 

“[T]he [DOEd] unreasonably requires [institutions of higher education] to comply with reporting requirements in as little as 10 days … This is ironic given that the [DOEd] itself regularly fails to meet deadlines for responding to Congressional inquiries,” the letter reads. 

Campus Reform contacted the Department of Education for comment, but did not get a response in time for publication. 

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