Senators Call on CFPB to Investigate Student Loan Servicer

A group of 20 Democratic Senators, including four of whom are currently running for president, sent a letter on Monday to Kathleen Kraninger, the director of the Consumer Financial Protection Bureau, requesting an investigation into how a student loan servicer’s “widespread violations of federal law” is causing “harm” to public service workers.

The Senators want the CFPB to investigate the Pennsylvania Higher Education Assistance Agency’s (PHEAA) “mismanagement” of the Public Service Loan Forgiveness (PSLF) program, which offered individuals who went into public service the opportunity to have their student loans forgiven by the federal government.

The request for an investigation follows a report from the Government Accountability Office that was released last month which questioned why only 1% of those who had applied for loan forgiveness under the PSLF had their applications approved.

“Under your leadership, the CFPB has failed to ensure the PHEAA makes good on the promise of loan forgiveness,” the Senators wrote in their letter. “Since 2017, the CFPB has refused to exercise its authority to conduct supervisory examinations of PHEAA’s servicing practices and its mismanagement of the PSLF program. We have repeatedly pressed the CFPB to conduct this critical oversight, but you have provided nothing but excuses for the CFPB’s inaction.”

The Senators accuse PHEAA of “widespread violations of federal law,” referencing a pair of lawsuits that have been filed against the company by the Attorneys General of Massachusetts and New York.

Among those who signed the letter are Sen. Bernie Sanders, Sen. Elizabeth Warren, Sen. Kamala Harris, Sen. Cory Booker, and Sen. Sherrod Brown.

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