RETURN TO REPAYMENT ROUNDUP: Here’s a look at some of the many moving pieces as the Federal Student Loan system begins to thaw out this week: — By the numbers: About 28 million federal student loan borrowers are returning to repayment. The borrowers who are set to resume repaying in October have a median debt “just over†$21,000, according to the Education Department. About a quarter of them owe less than $9,000, while another quarter of them owe more than $46,000. — Not all borrowers covered by the payment and interest pause will resume paying. About 8 million other borrowers won’t be required to pay because they’re still in school, have received another type of deferment or are waiting for a loan discharge that’s already been approved, the department said. Another 7 million borrowers remain in default on their loans since before the pandemic. — A government shutdown won’t disrupt the student loan restart, at least for now. Congress over the weekend passed a stopgap measure to fund most federal agencies at their existing levels through Nov. 17. — But the Education Department didn’t get the extra flexibility to more quickly spend administrative funding to run the federal student loan program. That could potentially spell further cuts to customer service levels that the agency provides borrowers in the coming months (just as it had to make earlier this year). — The stopgap bill lets agencies receive a prorated amount — about 13 percent, OMB determined— of last fiscal year’s level of funding for the next several weeks. — It’s yet not clear what, if any rollbacks the administration will have to make. An Education Department spokesperson said Saturday that the agency would “do the best it can with the resources available to support borrowers as they return to repayment†but added that “it is critical for Congress to pass government funding bills that fully fund†Federal Student Aid. — Democratic attorneys general are urging the Biden administration to “do more to mitigate harm to borrowers†from the return to repayment. A group of 19 attorneys general on Friday told the Education Department it should “liberally†put borrowers in forbearances and suspend interest accrual in cases where borrowers are having difficulty reaching their loan servicers, unable to access income-driven repayment programs, or are eligible or potentially eligible for a loan discharge through other policies. — House Republicans are urging the CFPB to ease up on student loan servicers. In a letter to the consumer bureau on Friday, seven GOP lawmakers on the House Financial Services Committee said they’re concerned that regulators may levy fines against federal loan servicers who provide degraded customer service. They argue in the letter, obtained by POLITICO’s Eleanor Mueller, that it’s really the Education Department’s funding cuts and Biden administration’s mismanagement of the loan programs, not the servicers, who are at fault.
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