- Massachusetts Sen. Elizabeth Warren is holding her first hearing on student debt cancelation on Tuesday.
- Witnesses include Rep. Ayanna Pressley of Massachusetts, who defaulted on her own student loans.
- Warren will also question student loan servicer Navient’s CEO on investigations regarding misleading borrowers.
- See more stories on Insider’s business page.
In her first hearing as Chair of the Senate Banking Committee’s Subcommittee on Economic Policy, Sen. Elizabeth Warren of Massachusetts will address the impact of student debt on racial justice, borrowers, and the economy.
On Tuesday, 11 witnesses, including Rep. Ayanna Pressley of Massachusetts and the CEO of student-loan servicer Navient, John Remondi, will testify at a hearing on the burden of the $1.7 trillion student debt crisis in the country. This will be Warren’s first official hearing on the topic, and it will likely amplify her previous calls on President Joe Biden to cancel $50,000 in student debt per person using his executive powers.
Pressley, who joined Warren in February to reintroduce a resolution to cancel $50,000 in student debt per person, said in a testimony published ahead of the hearing that she knows “what it feels like to wake up in a cold sweat over a student loan in default,” and in a matter of months, she said, the pause on federal student loan payments will be lifted, and many people, disproportionately people of color, will bear the burden of these payments.
“So, as we work to ensure an equitable and prompt recovery to the current economic crisis, we can’t afford to make the same mistakes of the past. We must be intentional and precise,” Pressley said. “And student debt cancellation is an efficient and effective way to provide families across this nation with economic relief and opportunity.”
Remondi is another notable witness attending the hearing. Navient is one of the nation’s largest student loan servicers, and, according to a letter to Remondi from Warren, currently services federal loans to 5.6 million borrowers and holds over $58 billion annually in federally guaranteed Federal Family Education Loan Program (FFELP) loans.
Warren said that between 2009 and 2019, Navient has been accused or fined for “actions that ripped off borrowers,” including the improper marketing of loans and failing to notify borrowers of their rights.
In addition, an ongoing Consumer Financial Protection Bureau investigation found evidence that Navient “systematically steered thousands of borrowers who were having difficulty paying their loans into plans that were worse for the borrowers – but more profitable for Navient.”
In February, three student loan borrowers filed a legal action against Navient, arguing that Navient owed them over $45,000 in overpayments that the company had wrongfully collected after their student loans had been discharged. This followed an Education Department ruling that Navient must repay the government $22 million in overcharged student loan subsidies.
Remondi will likely be asked to respond to those claims during the hearing.
Also attending the hearing are Maura Healey, the attorney general of Massachusetts, and James Steeley, president and CEO of the Pennsylvania Higher Education Assistance Agency.
Insider reported on Tuesday, citing Education Department data, that canceling $50,000 in student debt per person could wipe out the entire debt burden of 84% of federal student loan borrowers.