Attorney General Bonta Expresses Concerns About Student Loan Payments Resuming Amidst Potential Government Shutdown

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 18 attorneys general in submitting a letter to the Biden-Harris Administration raising concerns about federal student loan payments resuming on October 1, 2023, and asking for robust measures to protect borrowers. More than 40 million borrowers nationwide — approximately four million of whom are from California — will be returning to repayment. In the letter, the attorneys general underscore that they are particularly troubled by the looming government shutdown that may occur during the first week of repayment if Congress fails to pass legislation to fund government operations by the time current funding expires on September 30.

“Right now, there’s a good chance that the government will shut down on Sunday. That same day, millions of Americans will be required to start making their student loan payments again — even as many of them experience issues with their loan servicers," said Attorney General Bonta. "I urge the Biden-Harris Administration to continue to do everything in its power to protect student borrowers.”

In their letter, the attorneys general also:  

• Thank President Joe Biden and U.S. Education Secretary Miguel Cardona for their historic work to support student loan borrowers and reform our broken federal student loan repayment system, but highlight that borrowers have been experiencing serious and widespread loan servicing problems. For example, as the primary enforcers of their states’ respective consumer protection laws, the attorneys general have begun to see borrower complaints about servicers billing inaccurate amounts and borrowers are regularly encountering hold wait times well over 60 minutes.
• Note that several loan servicers have recently left the market, causing the transfer of over 30 million borrower accounts to another servicer. From experience, the attorneys general write that they know servicing transfers create a high risk of servicing errors.
• Recommend that the U.S. Department of Education instruct loan servicers to liberally place affected borrowers in non-interest-bearing administrative forbearances that count toward potential debt forgiveness while account issues are researched and resolved.

In sending today’s letter, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, Michigan, Minnesota, Nevada, New York, Oregon, Pennsylvania, Vermont, Washington, Wisconsin, and the District of Columbia.  

A copy of the letter can be found here.