Warren Holds Up Biden Education Department Pick Over Student Loan Reform

By Peter Wade, Rolling Stone

26 June 21

The senator is negotiating for changes in the way the federal government runs its student loan program

en. Elizabeth Warren (D-Mass.) is not messing around when it comes to student loan reform. The senator has been holding up the confirmation of President Biden’s nominee to lead higher ed policy at the Department of Education as a way of bargaining for promises to overhaul student loans, Bloomberg and the Washington Post reported.

The federal government manages $1.6 trillion in student loans. James Kvaal, Biden’s nominee to be undersecretary of education and the third-ranking official at the Education Department, would supervise the management of the loan program.

A source told Politico that Warren’s staff is in negotiations with the White House over a “range of necessary reforms in higher education including the administration of the student loan program.” Warren has been a critic of the private companies that manage federal student loans, Navient and Pennsylvania Higher Education Assistance Agency.

When Navient CEO John Remondi testified before Congress, Warren called on the federal government to fire the company over what she said were longstanding abusive and misleading practices towards borrowers. During her questioning of Remondi, the senator pointed out that a federal audit found Navient was training call center employees to push borrowers toward repayment options that made it more difficult for them to pay off their loans. She also said the company also overcharged the government by $22 million for its management of federal student loans, and Navient has refused to pay that money back.

“The federal government should absolutely fire Navient,” Warren told Remondi at the hearing. “And because this happened under your leadership, Navient should fire you.”

Warren and Senate Majority Leader Chuck Schumer have also pressed Biden to cancel up to $50,000 in loans for borrowers with student debt, although that is not the reason for holding up Kvaal’s nomination.

During his confirmation hearing, Kvaal pledged that reexamining student debts would be his first priority. “We see a lot of students whose loans are getting larger rather than smaller as they struggle to repay those loans, particularly among black students,” he said. Kvaal also endorsed ways of making college more affordable, including “investing in eliminating tuition at public colleges and universities [and] doubling Pell Grants.”

But Kvaal did not commit to student loan forgiveness. “We need to continue to explore ways to provide relief for students under the burden of loan debt while helping current and future students with affordable options,” he said.