Underwood Presses DeVos on Department of Education Failure to Appropriately Respond to Those Who Default on Student Loans

WASHINGTON- U.S. Congresswoman Lauren Underwood (IL-14), member of the House Committee on Education and Labor, today pressed Department of Education Secretary Betsy DeVos on the Department's failure to appropriately respond to borrowers who default on their student loans. Underwood's letter expressing concern with the Department's overall under-resourcing follows troubling reports by The Washington Post that warned of systemic failure. According to The WashingtonPost, the Department is experiencing an "unprecedented" breakdown in its systems designed to assist and communicate with vulnerable borrowers.

"Borrowers who default on their student loans deserve access to clear information about their financial options and to reasonable options for getting their payments back on track. Prompt answers are especially important to borrowers whose tax refunds are seized to cover their debts. Yet the Post describes multiple reports of borrowers who faced unacceptably long hold times and dropped calls when they attempted to contact the Department of Education's call centers," Congresswoman Underwood wrote.

"The circumstances facing borrowers that are described in this article are incredibly alarming. At home in Illinois's 14th District, I hear constantly from people in my community about the impact that student loan debt can have on their finances and their families. As a Member of the House Committee on Education and Labor, I take seriously my duties to represent their concerns in Congress," Underwood continued.

Full text of the letter below.

March 25, 2019

The Honorable Betsy DeVos

Secretary of Education

U.S. Department of Education

400 Maryland Avenue SW

Washington, D.C. 20202

Dear Secretary DeVos:

I write in response to a March 21, 2019 article in TheWashington Post that warns of systemic failures in the U.S. Department of Education's ability to appropriately respond to borrowers who default on their student loans.^[1] According to the Post, the Department is experiencing an "unprecedented" breakdown in its systems designed to assist and communicate with vulnerable borrowers.

Borrowers who default on their student loans deserve access to clear information about their financial options and to reasonable options for getting their payments back on track. Prompt answers are especially important to borrowers whose tax refunds are seized to cover their debts. Yet the Post describes multiple reports of borrowers who faced unacceptably long hold times and dropped calls when they attempted to contact the Department of Education's call centers.

Several factors are reportedly contributing to this breakdown in the Department's loan default servicing systems. First, a backlog of security clearance processing within the Administration has left teams responsible for defaulted loans at the Department of Education and its private collection agencies severely understaffed. The backlog compounds existing staffing shortages within the Office of Federal Student Aid, which has seen its staff levels reduced by seven percent by the Trump Administration.^[2] Second, the teams responsible for defaulted loans appear unprepared to cope with the typical increase in calls from borrowers during the annual tax season.

Furthermore, I am concerned that the Department is under-resourced overall, to the point of being unable to properly implement the recommendations of its own Inspector General. The Post reports that delays at the Department worsened after additional layers of screening were added in response to an audit that found contractors handling student accounts before their background checks had cleared. Despite this, the President's proposed budget for FY2020 slashes funding for the Department of Education by twelve percent.^[3]

Difficulties contacting the Department of Education can lead to additional financial costs to borrowers—making it even harder for them to pay back their defaulted loans. Staffing shortages at the call centers can deter defaulted borrowers attempting to restart payments through loan rehabilitation. Some borrowers may incur additional financial hardships due to delays at the Department, further limiting their capacity to make prompt payments on their student loans. And effectively requiring borrowers to spend large parts of their work days attempting to contact the Department of Education undermines their job performance.

The circumstances facing borrowers that are described in this article are incredibly alarming. At home in Illinois's 14^th District, I hear constantly from people in my community about the impact that student loan debt can have on their finances and their families. As a Member of the House Committee on Education and Labor, I take seriously my duties to represent their concerns in Congress. Therefore, I respectfully request that you provide a response in writing to this letter no later than April 8, 2019. In your response, please also provide answers to the following:

1. Please provide a status update on the Department of Education's effort to change its human services contractor and/or human services system and the effect, if any, of this effort on any delays in hiring.
2. How many vacancies are currently unfilled in the Office of Federal Student Aid because a candidate's security clearance or background check has not been processed?
3. How did the 2019 federal government shutdown affect security clearance or background check processing for vacancies in the Office of Federal Student Aid?
4. What are the current hours during which the Office of Federal Student Aid is open to borrowers' calls?
5. Please provide the number of calls placed to the Office of Federal Student Aid.
6. Please provide the following information about incoming calls placed to the Office of Federal Student Aid for the individual months of January 2019, February 2019, and March 2019:
   1. Number of incoming calls.
   2. Number of incoming calls that were dropped or not picked up.
   3. Average hold time.
7. What has the Department of Education done to prepare for the anticipated increase in calls from borrowers due to the 2019 tax filing season?

Please contact Caroline Paris-Behr on my staff at (202) 225-2976 with any questions. Thank you for your prompt attention to this inquiry.

Sincerely,

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