Democrats are pressing the Department of Education for more information about plans to address the status of borrowers in default once federal student loan payments resume in the coming weeks, The Hill reported. The agency earlier this month said it would allow borrowers with paused loans to receive a “fresh start” when resuming payments “by eliminating the impact of delinquency and default and allowing them to re-enter repayment in good standing.” The agency said that the move would be carried out as part of its efforts to help borrowers transition more “smoothly” into repayment, after federal student loan payments and interest accrual were paused for more than two years under a pandemic freeze. In a letter to the agency led by Sens. Elizabeth Warren (D-Mass.), Raphael Warnock (D-Ga.), Cory Booker (D-N.J.) and Bernie Sanders (I-Vt.), among others, the lawmakers said the move could “provide significant relief to millions of borrowers, particularly those who have most struggled with repaying their loans.” But the lawmakers pressed for more information about the steps the agency plans to take in rolling out the plan as well as protecting borrowers “who have been in default for an extended period of time.” The Federal Student Aid office characterizes a loan account as delinquent the first day after a borrower misses a payment. When an account remains delinquent, the borrower risks going into default, which can deal a significant blow to their credit rating and lead to a host of other consequences.
