"Biden Administration Takes Action Against Loan Servicers Amid Repayment Chaos and Risks to Borrowers"
The restart of federal student loan repayments has been marred by significant issues, including late bills, incorrect billing statements, and excessively long customer service wait times. The Education Department penalized its loan servicers for these failures, with Aidvantage, Nelnet, and EdFinancial facing financial penalties based on the number of affected borrowers. The Consumer Financial Protection Bureau highlighted a backlog in processing applications for the new income-driven payment plan, SAVE. Education Secretary Miguel Cardona assured that borrowers with late bills would not owe payments or incur interest during administrative forbearance, which counts towards loan forgiveness programs. Loan servicers and consumer advocates have expressed concerns over the rocky resumption process and the need for better solutions, including calls for student debt cancellation.