Federal: Advocacy Letter to CFPB Follow Up Letter to the Administration on the Conclusion of the Student Loan Repayment Moratorium

Richard Cordray
Chief Operating Officer
Office of Federal Student Aid
830 First Street NE, Room 112G1
Washington, DC 20202

Dear Mr. Cordray:

The American Fintech Council (AFC) and our members thank you for your leadership to provide temporary, emergency payment pause relief to more than 40 million federal student loan borrowers over the last two and a half years. Despite the impacts of the unprecedented global pandemic beginning in March 2020, the United States has experienced recovery in many areas. The unemployment rate for college graduates is now at record lows, employers are providing incentives to recruit for open positions, and the economy is gaining strength every day. The majority of borrowers are now more capable of repaying their loans when the moratorium ends on December 31, 2022. Now that President Biden has asserted this deadline as final, it is our hope the Office of Federal Student Aid (FSA) and its contracted federal student loan servicers use the coming weeks to proactively communicate with borrowers to ensure a transparent and smooth transition back into repayment.

Collaboration with contracted federal student loan servicers over the next three months is essential to ensure all borrowers are ready and prepared to resume payments. Although it will be a monumental task, we know proactive planning and clear communications with borrowers will make this effort more successful. As such, we urge FSA to publish the details of its plans to bring borrowers back into repayment, including clear timelines and any communications campaign it plans to launch designed to communicate with borrowers leading up to the end of the year.

As you are aware, borrowers deserve to know when they will hear from their contracted federal student loan servicer on resuming their student loan payments. Under the CARES Act, Congress required the Secretary of Education to send at least six notices to borrowers, beginning 60 days out, indicating when the borrower’s normal payment obligations will resume and reminding them of the option to enroll in an income-driven repayment plan. That 60-day timeline was put in place when the original payment pause was scheduled for just six months.

Additionally, we urge FSA to provide its contracted federal student loan servicers with the necessary funding and resources to ensure borrowers are receiving proactive communications now rather than later. The sooner FSA and their servicers send out repayment notices, the more opportunity borrowers have to budget and make financial plans. We do not want any borrowers to fall through the cracks and/or mistakenly miss opportunities to enroll in appropriate payment plans once they are responsible for repaying their loans again.

We encourage FSA to take full advantage of the time leading up to December 31 to implement strategies for successfully informing and transitioning borrowers back into repayment and assist borrowers in enrolling into affordable repayment plans if their financial conditions changed during the COVID-19 pandemic. Thank you for your consideration.

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Cc: Secretary Miguel Cardona