3 Issues on the Line for Scholar-Mortgage Debtors: Elizabeth Warren

• Trump’s decide for training secretary, Linda McMahon, has her affirmation listening to on Thursday.
• Sens. Elizabeth Warren and Andy Kim outlined how they plan to method the listening to.
• They’re planning to query McMahon on her method to the student-loan system and borrower protections.

Two Democratic lawmakers need President Donald Trump’s training secretary nominee to come back ready with concepts to guard student-loan debtors forward of her look in Congress this week.

Linda McMahon, Trump’s decide to steer the Division of Training, is scheduled to have her affirmation listening to on Thursday. Of their first preview of how they plan to method the listening to, Democratic Sens. Elizabeth Warren and Andy Kim despatched a letter to McMahon on Tuesday — solely seen by Enterprise Insider — outlining particular points they need McMahon to talk to.

These embrace protections and packages for student-loan debtors, studies on Trump’s plan to get rid of the Training Division, and oversight of the student-loan trade.

“The following Secretary of Training should battle for the perfect pursuits of scholars and households, not grasping and predatory for-profit faculties and inept mortgage servicers, and should reject excessive insurance policies and efforts to get rid of the Division,” Warren and Kim wrote of their letter.

Whereas McMahon has not but commented on any plans for student-loan debtors, Trump has beforehand been important of his predecessor’s debt reduction efforts and broad student-loan forgiveness.

Listed below are three student-loan points Warren and Kim are specializing in forward of McMahon’s affirmation listening to.

Focused student-debt reduction packages

Trump advised eliminating the Public Service Mortgage Forgiveness program throughout his first time period, which forgives scholar debt for presidency and nonprofit employees after 10 years of qualifying funds.

Warren and Kim wrote that if PSLF have been eradicated, over 3 million public service employees would “be denied the reduction that they anticipate to obtain and have deliberate their lives round.”

PSLF can’t be eradicated with out Congress, and never sufficient lawmakers have expressed help to make that occur.

Additionally they highlighted actions below Betsy DeVos, Trump’s training secretary throughout his first time period, which included rescinding the gainful employment rule, meant to make sure college students don’t graduate their packages with unaffordable debt. DeVos additionally ran up a backlog of borrower protection claims, which give reduction to debtors who proved they have been defrauded by their colleges.

The Democratic lawmakers requested extra info from McMahon on how she plans to deal with the packages which are meant to offer focused reduction to student-loan debtors.

Scholar-loan trade oversight

Former President Joe Biden took motion throughout his time period to strengthen oversight of the student-loan trade. For instance, following the return to compensation for tens of millions of debtors after the pandemic pause, Biden’s Training Division withheld pay from all 4 main federal mortgage servicers for failing to satisfy their contractual obligations to debtors.

Biden’s Training Division additionally launched an accountability framework for servicers, which included transferring debtors to better-performing servicers if wanted.

Warren and Kim need assurances from McMahon that that oversight will proceed.

“Rigorous enforcement of every of the framework’s elements has been important to defending debtors from servicer malfeasance,” they wrote.

Eliminating the Division of Training

Trump advised reporters final week that he hopes McMahon succeeds in placing herself out of a job, confirming his intent to finally get rid of the Division of Training altogether.

It is an thought Trump has beforehand advised, and it has help from Elon Musk, who’s main Trump’s DOGE fee aimed toward slashing authorities waste.

Warren and Kim warned of their letter that dismantling the division may have steep penalties.

“For working- and middle-class households, ED manages the federal scholar assist system, which helps tens of millions of Individuals cowl the price of school; this method just isn’t good, however it’s vastly preferable to a purely privatized system that might value households extra and supply no protections from predatory non-public scholar mortgage lenders,” they mentioned.