Liberal Sen. Elizabeth Warren's campaign against economic inequality has led her to focus on a new target: student loan giant Sallie Mae.
On Tuesday, Warren sent a letter to Sallie Mae chief executive Jack Remondi, requesting that he provide her office with, according to the Huffington Post, "scripts its customer service representatives follow, an accounting of its borrowers with federal student loans in income-based repayment plans, and the number of its delinquent borrowers who have brought their loan payments up to date."
In her letter, Warren told Remondi, "I am concerned that Sallie Mae too often takes steps that hurt its student borrowers." She went on to describe her worry that the company was pushing student borrowers into plans that would temporarily delay required payments while ultimately leaving them with higher payments and more debt than they would have if they enrolled in more generous government programs.
In the past, Warren has expressed concern that the Department of Education wasn't doing enough to make sure loan servicers like Sallie Mae were operating in student borrowers' best interest. She reiterated this sentiment in her letter to Remondi, writing, "Current federal contracts give loan servicers like Sallie Mae little incentive to keep borrowers from falling behind on their payments or to help borrowers find solutions that are best for them when they do fall behind."
Warren told Remondi she wants Sallie Mae to publicly disclose how many of its borrowers with federal student loans are in income-linked repayment plans and the number of borrowers who have been been placed into forbearance or deferment schemes multiple times. She also wants telephone scripts and guidance given to customer service representatives when they chat with delinquent borrowers and when they counsel borrowers on the benefits and drawbacks of various repayment options.
Warren also demanded to know how many borrowers who have defaulted on federal loans originally serviced by Sallie Mae were now being handled by the company’s default-focused business, Pioneer Credit Recovery, which also has a federal contract. Warren told Remondi the company should disclose the amount of commissions it has received on those loans.
“If Sallie Mae has confidence that its efforts at helping students avoid default are truly in the long-term interest of its distressed borrowers, it should be more transparent about the details of those efforts,” Warren wrote.
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