Attorney General Bonta Applauds Department of Education Actions to Fix Federal Student Loan Programs

OAKLAND – California Attorney General Rob Bonta today issued a statement on the U.S. Department of Education’s (ED) announcement that it will take action to address longstanding failures in its administration of federal student loan programs. In announcing a multistate settlement against Navient in January, Attorney General Bonta called on ED to address the $1.7 trillion student loan crisis and longstanding failures in federal student loan servicing. ED's announcement recognizes the concerns raised by Attorney General Bonta and other state attorneys general relating to the servicing and collection of federal student loans. 

“This announcement by the Department of Education is a step toward accountability. It marks a turning point for the many student loan borrowers who have been mistreated and misled by the federal student loan system,” said Attorney General Bonta. “As Attorney General, I am committed to holding predatory actors accountable and protecting California’s student loan borrowers. But state attorneys general cannot do it alone. For fundamental change, we need the Department of Education to take action, and yesterday, they did. I applaud the Department for providing immediate relief to borrowers whose only mistake was trusting Navient and other predatory actors to help them achieve their college dreams."

As part of the announcement, ED will, among other things, redress rampant forbearance steering perpetrated by student loan servicers, improve access to income-driven repayment options, provide immediate student loan forgiveness to at least 40,000 borrowers eligible for relief under the Public Service Loan Forgiveness program, and commit to strengthening critical regulations that protect students and taxpayers and hold for-profit schools to account, including borrower defense to repayment and gainful employment.

ED’s actions follow state attorneys general’s multistate settlement against Navient, one of the largest student loan servicers in the country, to resolve allegations of misconduct in the servicing and collection of federal student loans. It also follows a number of actions brought by the California Department of Justice against the prior federal administration seeking to strengthen student protections and for-profit school accountability, including legal challenges to ED’s repeal of the gainful employment rule, issuance of an illusory borrower defense rule, and mismanagement of the Public Service Loan Forgiveness Program, among others.