Biden’s Department of Education Withholds Millions of Dollars to Student Loan Servicer After Billing Statement ‘Errors’ – 800,000 Borrowers Put in Forbearance, Payments Halted
Biden, Department of Education Sec. Miguel Cardona
The Biden Regime will get their student loan bailout one way or another.
The Department of Education announced on Monday it is withholding $7.2 million from a student loan servicer over billing statement errors that affected 800,000 borrowers.
The US Supreme Court in July crushed Joe Biden’s student loan bailout program.
Joe Biden unilaterally announced a massive forgiveness of student loans in August 2022 to buy the Gen Z-Millennial vote in the 2022 midterms.
Biden canceled over $400 billion in student loans which turned out to be up to $10,000 in student debt for borrowers who earn $125,000 a year or less and up to $20,000 for recipients of Pell Grants.
The Supreme Court ruled 6-3 against Joe Biden’s student loan relief program so the Department of Education rolled out a workaround forbearance program to cancel $39 billion in student loans by counting non-payments as payments for a period of time.
Federal student loan payments were halted in March 2020 because of the Covid pandemic. Payments were set to resume this month.
The DoE penalized the Missouri Higher Education Loan Authority for mailing out ‘late’ billing statements to 2.5 million borrowers as repayments resumed. 800,000 borrowers were put in forbearance and will not have to make payments until the problem is resolved.
“The Biden-Harris Administration is looking out for borrowers at every step throughout their return to repayment. Our oversight efforts have uncovered errors from loan servicers that will not be tolerated. We took immediate actions to protect borrowers from the fallout of this error and hold the responsible servicers accountable, including by withholding $7.2 million in payment from one servicer,” Education Secretary Miguel Cardona said.
“The actions we’ve taken send a strong message to all student loan servicers that we will not allow borrowers to suffer the consequences of gross servicing failures. We are committed to fixing our country’s broken student loan system, and that includes strengthening oversight and accountability and taking every step possible to improve outcomes for borrowers,” Cardona added.
CNBC reported:
The U.S. Department of Education will penalize student loan servicer Mohela, or the Missouri Higher Education Loan Authority, for its failure to send timely billing statements to 2.5 million borrowers.
As a result of Mohela’s errors, more than 800,000 borrowers were delinquent on their loans, the Education Department said in a statement Monday.
The department is withholding $7.2 million in payment to Mohela for October and has directed the servicer to place all affected borrowers in forbearance until the issue is fully resolved, it said.
Higher education expert Mark Kantrowitz said he believed this was one of the first instances of the government withholding payment from a student loan servicer.
“Borrowers are penalized for making late payments,” Kantrowitz said. “It is only fair for the loan servicer to be penalized for mailing late statements.”
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