Biden administration cuts pay for student loan servicers after a bungled return to repayment
The Biden administration is docking more than $2 million in payments to student loan servicers that failed to send billing statements on time after the end of a pandemic payment freeze
WASHINGTON (AP) — The Biden administration is docking more than $2 million in payments to student loan servicers that failed to send billing statements on time after the end of a pandemic payment freeze.
The Education Department said Friday it will withhold payments from Aidvantage, EdFinancial and Nelnet for failing to meet their contractual obligations. The servicers failed to send timely statements to more than 750,000 borrowers in the first month of repayment, the agency said.
Education Secretary Miguel Cardona said his agency will continue to pursue “aggressive oversight” and won’t give loan servicers “a free pass for poor performance.”
It’s the latest attempt to straighten out a process that has been marred by errors after student loan payments restarted in October. Tens of thousands of borrowers have received billing statements late or with incorrect amounts as servicers scrambled to jumpstart the process.
