AG Henry Urges Biden Administration to Strengthen Safeguards for Borrowers as Student Loan Payments Resume

October 2, 2023 | Topic: Consumers

AG Henry joins 19 Attorneys General in calling for further protections when student loan payments resume in October

HARRISBURG– Attorney General Michelle Henry announced that she is continuing her efforts to protect Pennsylvania student loan borrowers by joining a multistate letter pushing the Biden administration to offer additional safeguards to borrowers as payments resume in October.

In the letter, the coalition of Attorneys General caution that current circumstances are likely to create serious and widespread loan servicing problems, as lenders are obligated to assist borrowers, oversee servicers, and enforce borrower protections during the return to repayment.

Nationwide, over 40 million borrowers are set to resume making payments this month, following a three-and-a-half-year pandemic payment pause. In that time, a majority of loans were transferred to different loan servicers.

“There are millions of Pennsylvanians set to resume loan payments and they need support and assistance to ensure their payment rates are accurate and fair,” Attorney General Henry said. “I am extremely concerned that loan servicers are unprepared or overwhelmed by the sheer amount of borrowers entering repayment at the same time, which could lead to drastic account errors.”

Additionally, some servicers appear to be struggling to begin implementation of the new SAVE plan. For example, earlier this month, MOHELA, the servicer that manages all accounts on track for Public Service Loan Forgiveness, had to re-issue payment notices for borrowers enrolled in the SAVE plan. This became necessary because MOHELA’s original notices, issued in August 2023, listed a higher monthly payment than allowable under the SAVE guidelines that took effect in July 2023.

In their letter, the states also express concern that many of the reported account issues are affecting low-income borrowers and they go on to explain that although the Biden Administration has opened potential additional avenues toward debt relief, these avenues are of limited use in resolving return to repayment problems and do not address the problem of interest accrual.

While the states appreciate the steps the Biden Administration has taken to protect borrowers who miss monthly payments in the first twelve months of repayment from credit harm and default, they believe further action can and should be taken. Specifically, the coalition urges the Biden Administration to do more to mitigate harm to borrowers, including instructing its servicers to liberally place borrowers affected by servicing errors, or who are unable to obtain affordable monthly payments consistent with the Department of Education’s guidelines, into forbearance until these issues are corrected. The letter asks that the same forbearance be applied for groups of borrowers who are awaiting loan forgiveness.

Attorney General Henry also encourages student loan borrowers to enroll in the federal SAVE Plan. It is the new income driven repayment (IDR) plan, and could reduce your payments significantly even if you were previously enrolled in an IDR plan. You can enroll in the SAVE plan by contacting your servicer or visiting

In sending the letter, co-led by Massachusetts Attorney General Andrea Joy Campbell and Washington Attorney General Bob Ferguson, Pennsylvania was joined by the Attorneys General of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, New York, Oregon, Vermont, Wisconsin, and the District of Columbia.

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