    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                     EXAMINING THE POLICIES AND PRIORITIES
                      OF THE OFFICE OF FEDERAL STUDENT AID

    =======================================================================

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
                              HIGHER EDUCATION AND
                              WORKFORCE INVESTMENT

                                     of the

                        COMMITTEE ON EDUCATION AND LABOR
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                HEARING HELD IN WASHINGTON, DC, OCTOBER 27, 2021

                                   __________

                               Serial No. 117-32

                                   __________

          Printed for the use of the Committee on Education and Labor

                    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

              Available via: edlabor.house.gov or www.govinfo.gov

                                   __________

                     U.S. GOVERNMENT PUBLISHING OFFICE

    46-028 PDF                WASHINGTON : 2022

                        COMMITTEE ON EDUCATION AND LABOR

                 ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

    RAUL M. GRIJALVA, Arizona            VIRGINIA FOXX, North Carolina,
    JOE COURTNEY, Connecticut              Ranking Member
    GREGORIO KILILI CAMACHO SABLAN,      JOE WILSON, South Carolina
      Northern Mariana Islands           GLENN THOMPSON, Pennsylvania
    FREDERICA S. WILSON, Florida         TIM WALBERG, Michigan
    SUZANNE BONAMICI, Oregon             GLENN GROTHMAN, Wisconsin
    MARK TAKANO, California              ELISE M. STEFANIK, New York
    ALMA S. ADAMS, North Carolina        RICK W. ALLEN, Georgia
    MARK DeSAULNIER, California          JIM BANKS, Indiana
    DONALD NORCROSS, New Jersey          JAMES COMER, Kentucky
    PRAMILA JAYAPAL, Washington          RUSS FULCHER, Idaho
    JOSEPH D. MORELLE, New York          FRED KELLER, Pennsylvania
    SUSAN WILD, Pennsylvania             GREGORY F. MURPHY, North Carolina
    LUCY McBATH, Georgia                 MARIANNETTE MILLER-MEEKS, Iowa
    JAHANA HAYES, Connecticut            BURGESS OWENS, Utah
    ANDY LEVIN, Michigan                 BOB GOOD, Virginia
    ILHAN OMAR, Minnesota                LISA C. McCLAIN, Michigan
    HALEY M. STEVENS, Michigan           DIANA HARSHBARGER, Tennessee
    TERESA LEGER FERNANDEZ, New Mexico   MARY E. MILLER, Illinois
    MONDAIRE JONES, New York             VICTORIA SPARTZ, Indiana
    KATHY E. MANNING, North Carolina     SCOTT FITZGERALD, Wisconsin
    FRANK J. MRVAN, Indiana              MADISON CAWTHORN, North Carolina
    JAMAAL BOWMAN, New York, Vice-Chair  MICHELLE STEEL, California
    MARK POCAN, Wisconsin                JULIA LETLOW, Louisiana
    JOAQUIN CASTRO, Texas                Vacancy
    MIKIE SHERRILL, New Jersey
    JOHN A. YARMUTH, Kentucky
    ADRIANO ESPAILLAT, New York
    KWEISI MFUME, Maryland

                       Veronique Pluviose, Staff Director
                      Cyrus Artz, Minority Staff Director
                                     ------

           SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT

                    FREDERICA S. WILSON, Florida, Chairwoman

    MARK TAKANO, California              GREGORY F. MURPHY, North Carolina
    PRAMILA JAYAPAL, Washington            Ranking Member
    ILHAN OMAR, Minnesota                GLENN GROTHMAN, Wisconsin
    TERESA LEGER FERNANDEZ, New Mexico   ELISE M. STEFANIK, New York
    MONDAIRE JONES, New York             JIM BANKS, Indiana
    KATHY E. MANNING, North Carolina     JAMES COMER, Kentucky
    JAMAAL BOWMAN, New York              RUSS FULCHER, Idaho
    MARK POCAN, Wisconsin                MARIANNETTE MILLER-MEEKS, Iowa
    JOAQUIN CASTRO, Texas                BOB GOOD, Virginia
    MIKIE SHERRILL, New Jersey           LISA C. McCLAIN, Michigan
    ARIANO ESPAILLAT, New York           DIANA HARSHBARGER, Tennessee
    RAUL M. GRIJALVA, Arizona            VICTORIA SPARTZ, Indiana
    JOE COURTNEY, Connecticut            JULIA LETLOW, Louisiana
    SUZANNE BONAMICI, Oregon             VIRGINIA FOXX, North Carolina
    ROBERT C. ``BOBBY'' SCOTT, Virginia    (ex officio)
      (ex officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on October 27, 2021.................................     1

    Statement of Members:
        Wilson, Hon. Frederica S., Chairwoman, Subcommittee on Higher

          Education and Workforce Investment.........................     1
            Prepared statement of....................................     4
        Murphy, Hon. Gregory F., Ranking Member, Subcommittee on
          Higher
          Education and Workforce Investment.........................     5
            Prepared statement of....................................     7

    Statement of Witnesses:
        Cordray, Hon. Richard, Chief Operating Officer, U.S.
          Department of Education Office of Federal Student Aid......     8
            Prepared statement of....................................    11

    Additional Submissions:
        Questions submitted for the record by:
            Chairman Scott...........................................    60
            Chairwoman Wilson........................................    60
            Castro, Hon. Joaquin, a Representative in Congress from
              the State of Texas.....................................    61
            Ranking Member Foxx......................................    61
            Banks, Hon. Jim, a Representative in Congress from the
              State of Indiana.......................................    62
            Miller-Meeks, Hon. Mariannette, a Representative in
              Congress from the State of Iowa........................    63
            McClain, Hon. Lisa C., a Representative in Congress from
              the State of Michigan..................................    63
            Letlow, Hon. Juia, a Representative in Congress from the
              State of Louisiana.....................................    63
        Response to question submitted for the record by:
            Mr. Cordray..............................................    65

                     EXAMINING THE POLICIES AND PRIORITIES
                      OF THE OFFICE OF FEDERAL STUDENT AID

                                  ----------

                          Wednesday, October 27, 2021

                      House of Representatives,
                          Subcommittee on Education and
                                  Workforce Investment,
                              Committee on Education and Labor,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:16 p.m.,
    via Zoom, Hon. Frederica S. Wilson (Chairwoman of the
    Subcommittee) presiding.
        Present: Representatives Wilson, Jayapal, Leger Fernandez,
    Manning, Bowman, Pocan, Castro, Sherrill, Espaillat, Courtney,
    Bonamici, Scott (ex officio), Murphy, Grothman, Banks, Comer,
    Miller-Meeks, Good, McClain, Harshbarger, Letlow, and Foxx (ex
    officio).
        Staff present: Katie Berger, Professional Staff; Jessica
    Bowen, Professional Staff; Rashage Green, Director of Education
    Policy; Christian Haines, General Counsel; Rasheedah Hasan,
    Chief Clerk; Sheila Havenner, Director of Information
    Technology; Eli Hovland, Policy Associate; Ariel Jona, Policy
    Associate; Andre Lindsay, Policy Associate; Max Moore, Staff
    Assistant; Mariah Mowbray, Clerk/Special Assistant to the Staff
    Director; Kayla Pennebecker, Staff Assistant; Veronique
    Pluviose, Staff Director; Manasi Raveendran, Director of
    Education Oversight and Counsel; Banyon Vassar, Deputy Director
    of Information Technology; Claire Viall, Professional Staff;
    Cyrus Artz, Minority Staff Director; Caitlin Burke, Minority
    Professional Staff Member; Michael Davis, Minority Operations
    Assistant; Amy Raaf Jones, Minority Director of Education and
    Human Resources Policy; David Maestas, Minority Fellow; Hannah
    Matesic, Minority Director of Member Services and Coalitions;
    Eli Mitchell, Minority Legislative Assistant; Chance Russell,
    Minority Professional Staff Member; Mandy Schaumburg, Minority
    Chief Counsel and Deputy Director of Education Policy; and Brad
    Thomas, Minority Senior Education Policy Advisor.
        Chairwoman Wilson. Good morning. We are ready to begin. I
    will count down from five and then we will start. Five, four,
    three, two, one. The Subcommittee on Higher Education and
    Workforce Investment will come to order. Welcome everyone.
        I note that a quorum is present. I note for the
    Subcommittee that Mr. Keller of Pennsylvania and Mr. Fitzgerald
    of Wisconsin are permitted to participate in today's hearing
    with the understanding that their questions will come only
    after all Members of the Subcommittee on both sides of the
    aisle who are present have had an opportunity to question the
    witnesses.
        The Subcommittee is meeting today to hear testimony on
    policies and priorities of the Office of Federal Student Aid.
    This is an entirely remote hearing. All microphones will be
    kept muted as a general rule to avoid unnecessary background
    noise.
        Members and witnesses will be responsible for unmuting
    themselves when they are recognized to speak, or when they wish
    to seek recognition. I also ask that Members please identify
    themselves before they speak. Members should keep their cameras
    on in the proceeding. Members be present in the proceeding when
    they are visible on camera, and they should be considered not
    present when they are not visible on camera.
        The only exception to this if they are experiencing
    technical difficulty and inform Committee staff of such
    difficulty. If any Member experiences technical difficulties
    during the hearing you should stay connected on the platform,
    make sure you are muted, and use your phone to immediately call
    the Committee's IT director whose number was provided in
    advance.
        Should the Chair experience technical difficulties or need
    to step away to vote on the floor Representative Bonamici or
    another majority Member is hereby authorized to assume the
    gavel in the Chair's absence. This is an entirely remote
    hearing and as such the Committee's hearing room is officially
    closed. Members who choose to sit with their individual devices
    in the hearing room must wear headphones to avoid feedback,
    echoes, and distortion resulting from more than one person on
    the same software platform sitting in the same room.
        Members are also expected to adhere to social distancing
    and safe healthcare guidelines, including the use of masks,
    hand sanitizer, and wiping down their areas both before and
    after their presence in the hearing room.
        In order to ensure that the Committee's five-minute rule is
    adhered to staff will be keeping track of time using the
    Committee's field timer. The field timer will appear in its own
    thumbnail picture, and it will be named 001_timer. There will
    be no one minute remaining warning. The field timer will show a
    blinking light when time is up.
        Members and witnesses are asked to wrap up promptly when
    their time has expired. Pursuant to Committee Rule 8(c) opening
    statements are limited to the Chair and the Ranking Member.
    This allows us to hear from our witnesses--in this case, our
    witness sooner, and provides all Members with adequate time to
    ask questions.
        I recognize myself now for the purpose of making an opening
    statement. Today we meet to discuss the Office of Federal
    Student Aid work to protect and support student borrowers. Mr.
    Cordray welcome to the Committee on Education and Labor and
    your first hearing before Congress in your role as FSA's Chief
    Operating Officer. We are honored to have you here this
    morning.
        Under your leadership FSA manages Federal financial aid
    programs including Pell grants, campus-based aid, and Federal
    student loans. This is a tremendous responsibility as there are
    43 million Federal student loan borrowers who owe more than 1.5
    trillion dollars.
        Alarmingly, under Secretary Devos and President Trump, the
    Department abandoned his responsibility to America's students
    and taxpayers, including by withholding debt relief from
    hundreds of thousands of students who were defrauded by low-
    quality institutions, allowing predatory institutions to
    collect millions of dollars from taxpayers, shielding student
    loan servicing companies from regulatory agencies and State law
    enforcement, and failing to ensure borrowers receive accurate
    information about critical programs, such as the public student
    loan forgiveness program, that are designed to support student
    borrowers and their families.
        So, I am grateful that we now have an education department
    that is listening to student borrowers and working diligently
    to better support them. I recently heard from a constituent who
    was a teacher with nearly $100,000.00 in outstanding student
    loan debt. His loan balance has ballooned because the monthly
    payment that he can afford to make have failed to keep pace
    with interest on his loan.
        This experience is not unique, which is why I applaud the
    transformative actions that the Department of Education has
    taken under your leadership and the leadership of Secretary
    Cardona to provide hundreds of thousands of student borrowers
    with the loan relief they were legally entitled to receive.
        And I look forward to the outcome of the Department's
    ongoing negotiated rulemaking process, which will hopefully
    provide further relief to low-income borrowers and others and
    streamline the loan repayment process.
        In August the administration took action to discharge the
    loans of 364,000 borrowers who had a total and permanent
    disability. The Department also made important changes to
    streamline and automate relief for eligible borrowers in the
    future and ensure that their loans are not mistakenly
    reinstated.
        The Biden administration has also approved student loan
    relief for 92,000 student borrowers who were defrauded by their
    institutions and secured relief for an additional 115,000
    Federal student borrowers who were left stranded by the sudden
    collapse of ITT Technical Institute.
        And most recently the administration announced major
    changes to the public service loan forgiveness program both
    through a time limited waiver and the rulemaking process to
    keep our promise to nurses, teachers, first responders, and
    other public service workers.
        Many public servants across the country have already been
    notified that help is on the way. In total, the Biden/Harris
    administration has erased 9.5 billion dollars in loans for
    563,000 borrowers. In many cases the relief provided has helped
    give borrowers and their families a second chance to a better
    life.
        I also applaud the steps the Department has taken to
    protect students and taxpayers from low-quality institutions,
    including reinstating the FSA's enforcement unit which was
    dormant under Secretary DeVos. While the Department's progress
    has been encouraging, FSA is facing a series of major hurdles
    that are on the horizon. The upcoming return of loan repayment
    presents a monumental task for FSA and student loan services.
        We must ensure that students receive the education and
    support they need to begin repaying. They're going to need a
    lot of support to transition. Many borrowers may be unsure of
    their rights and responsibilities and are experiencing
    continued financial hardship caused by this looming pandemic
    that may entitle them to change their repayment plans.
        We have to monitor this very carefully. Loan serving
    companies need a robust and well-trained workforce to support
    an increased volume of borrower requests as repayment begins.
        And finally, while the shift to Next Gen is a major
    opportunity to make long needed reforms to student loan
    servicing, the continuous delays under the Trump administration
    have left FSA with no margin for error. This hearing is a
    chance to learn about FSA's plans to address these critical
    issues, how they are balancing various priorities and what is
    being done to ensure that low-income borrowers and other risk
    groups, receive the appropriate attention from their loan
    services and FSA. Black students are the most impacted by
    student loans. I look forward to our discussion and the work
    you have ahead to ensure that all students--all students in
    this country can access high-quality, higher education without
    taking on debt they cannot repay, or falling victim to
    predatory institutions.
        Thank you again Mr. Cordray for being with us today and for
    your work to secure relief for student borrowers. We applaud
    you. I now recognize the distinguished Ranking Member for the
    response of making an opening statement. Welcome Dr. Murphy.
        [The prepared statement of Chairwoman Wilson follows:]

      Statement of Hon. Frederica S. Wilson, Chairwoman, Subcommittee on
                   Higher Education and Workforce Investment

        Today, we meet to discuss the Office of Federal Student Aid's work
    to support and protect student borrowers. Mr. Cordray, welcome to the
    Committee on Education and Labor and to your first hearing before
    Congress in your role as FSA's chief operating officer. We are honored
    to have you here this morning.
        Under your leadership, FSA manages Federal financial aid programs
    including Pell Grants, campus-based aid, and Federal student loans.
        This is a tremendous responsibility as there are 43 million Federal
    student loan borrowers who owe more than 1.5 trillion dollars.
        Alarmingly, under Secretary DeVos and President Trump, the
    department abandoned its responsibility to America's students and
    taxpayers, including by:

       Withholding debt relief from hundreds of thousands of
            students who were defrauded by low-quality institutions;

       Allowing predatory institutions to collect millions of
            dollars from taxpayers;

       Shielding student loan servicing companies from regulatory
            agencies and State law enforcement; and

       Failing to ensure borrowers received accurate information
            about critical programs, such as the Public Service Loan
            Forgiveness Program, that are designed to support student
            borrowers and their families.

        I am grateful that we now have an Education Department that is
    listening to student loan borrowers and working diligently to better
    support them.
        I recently heard from a constituent who is a teacher with nearly a
    hundred thousand dollars in outstanding student loan debt. His loan
    balance has ballooned because the monthly payments that he can afford
    to make have failed to keep pace with the interest on his loan.
        This experience is not unique, which is why I applaud the
    transformative actions that the Department of Education has taken under
    your leadership and the leadership of Secretary Cardona to provide
    hundreds of thousands of student borrowers with the loan relief they
    were legally entitled to receive.
        And I look forward to the outcome of the Department's ongoing
    negotiated rulemaking process, which will hopefully provide further
    relief to low-income borrowers and others and streamline the loan
    repayment process.
        In August, the administration took action to discharge the loans of
    364,000 borrowers who have a total and permanent disability. The
    department also made important changes to streamline and automate
    relief for eligible borrowers in the future and ensure that their loans
    are not mistakenly reinstated.
        The Biden administration has also approved student loan relief for
    92,000 student borrowers who were defrauded by their institutions, and
    secured relief for an additional 115,000 Federal student borrowers who
    were left stranded by the sudden collapse of ITT Technical Institute.
        And most recently, the administration announced major changes to
    the Public Service Loan Forgiveness program, both through a time-
    limited waiver and the rulemaking process, to keep our promise to
    nurses, teachers, first responders, and other public service workers.
    Many public servants across the country have already been notified that
    help is on the way.
        In total, the Biden-Harris administration has erased $9.5 billion
    in loans for 563,000 borrowers. In many cases, the relief provided has
    helped give borrowers and their families a second chance to a better
    life.
        I also applaud the steps that the Department has taken to protect
    students and taxpayers from low-quality institutions, including
    reinstating the FSA's Enforcement Unit, which was dormant under
    Secretary DeVos.
        While the department's progress has been encouraging, FSA is facing
    a series of major hurdles that are on the horizon.
        The upcoming return to loan repayment presents a monumental task
    for FSA and student loan servicers. We must ensure that students
    receive the education and support they need to begin repaying. They're
    going to need a lot of support to help transition. Many borrowers may
    be unsure of their rights and responsibilities or are experiencing
    continued financial hardship caused by this looming pandemic, that may
    entitle them to change their repayment plan. We have to monitor this
    very carefully.
        Loan-serving companies need a robust and well-trained workforce to
    support an increased volume of borrower requests as repayment begins.
        And finally, while the shift to NextGen is a major opportunity to
    make long-needed reforms to student loan servicing, the continuous
    delays under the Trump administration have left FSA with no margin for
    error.
        This hearing is a chance to learn about FSA's plans to address
    these critical issues, how they are balancing various priorities, and
    what is being done to ensure that low-income borrowers and other at-
    risk groups receive the appropriate attention from their loan servicers
    and FSA. Black students are the most impacted by student loans.
        I look forward to our discussion and the work we have ahead to
    ensure that all students--all students--in this country can access
    high-quality higher education without taking on debt they cannot repay
    or falling victim to predatory institutions.
        Thank you, again, Mr. Cordray, for being with us today and for your
    work to secure relief for student borrowers. We applaud you. I now
    recognize the distinguished Ranking Member for the purpose of making an
    opening statement. Welcome Dr. Murphy.
                                     ______

        Mr. Murphy. Thank you, Madam Chairman. Thank you very much
    for those opening comments. Before I get to my statement, I
    appreciate the complexity of this issue. We have so many people
    that don't understand that signing on a dotted line means that
    they have to pay money back.
        Also we have understanding unfortunately, that so many of
    our institutions of higher education have not been bastions of
    financial prudence, and therefore those financial burdens are
    laid upon those students. So it's really a multifactorial
    problem. We need to get on our institutions to cut back costs
    so that students do not have their futures forsaken, so I
    appreciate the comments.
        So you know the Office of Federal Student Aid is an
    important agency that is responsible for overseeing the
    disbursement of over 100 billion in grants, loans, and student
    aid dollars each year. Through such aid millions of students
    are able to pursue postsecondary education who would otherwise
    not have the means to do so, and that's a very, very, just
    cause.
        In addition to this vital function FSA plays in higher
    education, FSA is also tasked with overseeing one of the
    greatest challenges that the Department of Education has faced
    since its inception, returning nearly 45 million borrowers into
    repayment status after nearly 2-year hiatus in response to the
    COVID-19 pandemic.
        The stakes could not be higher as the consequence of a
    failed transition would be catastrophic as millions of
    borrowers, those who signed on the dotted line, could
    needlessly default on their loans, thus ruining their own
    financial future. This should be the full focus of FSA, but
    unfortunately this office has bowed somewhat to partisan
    politics and put the wishes of a democratic party progressive
    face over the immediate needs of those students who they serve.
        Instead of working with its partners to ensure the
    transition to repayment runs smoothly, FSA has taken to an us
    versus them approach, treating these contractors more like
    adversaries than the critical partners that they really are.
    It's not a stretch to assume that such rhetoric from the
    highest levels of FSA contributed to the exit of several
    Federal student loan services over the last year who have
    collectively served 16.5 million borrowers.
        Further, FSA is currently carrying out the implementation
    of the FAFSA simplification and the Future Act. Instead of
    focusing on their implementation, which is critical to the
    disbursement of Federal student aid dollars, FSA has decided to
    spend its energy harping on for-profit colleges through the
    revival of an Obama era enforcement unit, while turning a blind
    eye to the misdeeds of institutions that serve a vast majority
    of students.
        To make matters worse, the Biden administration is using a
    permanent pandemic narrative to expand its takeover of higher
    education, recently announcing an executive action to overhaul
    the public service loan forgiveness program in direct conflict
    with the law that democrats unilaterally wrote.
        This will undoubtedly take away necessary resources that
    should be allocated to the soon to be disaster in the Federal
    student loan program. In addition to the massive overreach of
    executive authority, this policy is fundamentally unjust. It
    puts taxpayers--the majority of whom do not own a college
    degree on the hook for billions of dollars in student loans
    borrowed by individuals making more than those taxpayers.
        This is on top of 100 billion dollars taxpayers are already
    responsible for due to continuation of the student loan
    repayment pause. Given FSA has decided to spend its given, on
    pleasing progressive advocates, it's usurping Cordray's team to
    pushing others to do FSA's job, including telling states to
    regulate Federal student loan services.
        FSA's lack of leadership will ultimately hurt the very
    students it claims to care about. For these reasons I'm glad
    Chairwoman has called this hearing today. Committee republicans
    have requested information regarding all of these critical
    issues, but unfortunately, we received little or no response
    with the exception of an 11th hour letter that sadly did not
    address our questions.
        As I would expect should be and should be the case.
    Unfortunately rather, we have Chief Operating Officer Cordray
    here today to provide these answers for us, and I look forward
    to hearing more details on all of these issues. Thank you,
    Madam Chairman. With that I will yield back.
        [The prepared statement of Mr. Murphy follows:]

     Statement of Hon. Gregory F. Murphy, Ranking Member, Subcommittee on
                   Higher Education and Workforce Investment

        The Office of Federal Student Aid (FSA) is an important agency that
    is responsible for overseeing the disbursement of over $100 billion in
    grants, loans, and other student aid dollars each year.
        Through such aid, millions of students are able to pursue
    postsecondary education who otherwise would not have the means to do so
    and that's a very just cause.
        In addition to this vital function FSA plays in higher education,
    FSA is also tasked with overseeing one of the greatest challenges the
    Department of Education has faced since its inception--returning nearly
    45 million borrowers into repayment status after a near 2-year pause in
    response to the COVID-19 pandemic.
        The stakes could not be higher as the consequences of a failed
    transition would be catastrophic--as millions of borrowers, those who
    signed on the dotted line, could needlessly default on their loans,
    thus ruining their financial future.
        This should be the sole focus of FSA, but unfortunately, this
    office has bowed somewhat to partisan politics and put the wishes of
    the Democrat party's progressive base over the immediate needs of
    student borrowers.
        Instead of working with its partners to ensure the transition to
    repayment runs smoothly, FSA has taken an 'us versus them approach,'
    treating these contractors more like adversaries than the critical
    partners that they really are. It's not a stretch to assume that such
    rhetoric from the highest levels of FSA contributed to the exit of
    several Federal student loan servicers over the last year who
    collectively serve 16.5 million borrowers.
        Further, FSA is also currently carrying out the implementation of
    the FAFSA Simplification Act and the FUTURE Act. Instead of focusing on
    their implementation which is critical to the disbursement of Federal
    student aid dollars, FSA has decided to spend its energy harping on
    for-profit colleges through the revival of an Obama-era enforcement
    unit while turning a blind eye to the misdeeds of institutions that
    serve the vast majority of students.
        To make matters worse, the Biden administration is using the
    permanent pandemic narrative to expand its takeover of higher
    education, recently announcing an executive action overhaul of the
    Public Service Loan Forgiveness program in direct conflict with the law
    Democrats unilaterally wrote. This will undoubtedly take away necessary
    resources that should be allocated to the soon to be disaster in the
    Federal student loan program.
        In addition to being a massive overreach of executive authority,
    this policy is fundamentally unjust. It puts taxpayers--the majority of
    which do not hold a college degree--on the hook for billions in student
    loans borrowed by individuals making more than those taxpayers.
        This is on top of the $100 billion taxpayers are already
    responsible for due to the continuation of the student loan repayment
    pause. We have received little to no response, with the exception of a
    few 11th hour letters that sadly did not address our questions and I
    expect you all knew would be the case.
        Given FSA has decided to spend its energy on pleasing progressive
        advocates, its unsurprising Cordray's team are pushing others to do
    FSA's job, including telling states to regulate Federal student loan
    servicers. FSA's lack of leadership will ultimately hurt the very
    students it claims to care about.
        For these reasons, I am glad the Chairwoman has called for this
    hearing today. Committee Republicans have requested information
    regarding all these critical issues. But unfortunately, we have
    received little to no response, with the exception of a few 11th hour
    letters that sadly did not address our questions as I expect you all
    knew would be the case.
        But fortunately, we have Chief Operating Officer Richard Cordray
    today and I look forward to hearing more details on all of these
    issues.
                                     ______

        Chairwoman Wilson. Our witness, Mr. Richard Corday is the
    Chief Operating Officer, COO, of Federal Student Aid, FSA.
    Prior to his role, Mr. Cordray served for 6 years as the
    Director of the Consumer Financial Protection Bureau, CFPB.
    Before joining CFPB, Mr. Cordray served as Ohio's Attorney
    General and also served as Ohio Treasurer and Ohio State
    Representative and Ohio's Solicitor General. Welcome. We
    appreciate--we will now hear from our witness today.
        Mr. Cordray. All right, thank you, Chair Wilson, Ranking
    Member Murphy, and Members of the Subcommittee.
        Chairwoman Wilson. We appreciate you for participating
    today and look forward to your testimony. Let me remind you
    that we have read your written statement, and it will appear in
    full in the hearing record. Pursuant to Committee Rule 8(d) and
    Committee practice, you are asked to limit your oral
    presentation to a 5-minute summary of your written statement.
        Before you begin your testimony please remember to unmute
    your microphone and start your testimony. Staff will be keeping
    track of time and a light will blink when time is up. Please be
    attentive to the time, wrap up when your time is over, and
    remute your microphone.
        If you experience technical difficulty during your
    testimony, or later in the hearing, you should stay connected
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        After your presentation we will move to Member questions.
    When answering the questions please remember to unmute your
    microphone. The witness is aware of his responsibility to
    provide accurate information to the Subcommittee, and therefore
    we will proceed with this testimony. And now, welcome Mr.
    Cordray.

      STATEMENT OF HON. RICHARD CORDRAY, CHIEF OPERATING OFFICER,
       U.S. DEPARTMENT OF EDUCATION OFFICE OF FEDERAL STUDENT AID

        Mr. Cordray. Thank you, Chair Wilson. I think I jumped the
    gun there a moment, Ranking Member Murphy, Members of the
    Subcommittee, thank you for allowing me to testify today about
    the Federal student aid's priorities. And though I'm no
    stranger to testifying before Congress, this is my first
    occasion in my new position.
        Right now at FSA we face great challenges as we seek to
    provide the quality service that students, borrowers, and
    families deserve. Everyone has felt the effects of COVID-19
    which has produced a notable downturn in both FAFSA completion
    enrollment rates. This should be of grave concern to all of us
    who want to see our country achieve its full potential for
    generations to come.
        Our top priority every year is to ensure that students and
    their families have reliable, uninterrupted access to the
    financial help they need. The FAFSA form itself is facing huge
    changes as we implement two new laws you passed to improve the
    student aid process. The changes you legislated will make it
    easier to complete the FAFSA form, unlocking aid for many more
    Americans.
        The operational challenges are extensive, and we're being
    deliberate and strategic in planning to implement them. We're
    also working to reform the FAFSA verification process to reduce
    the burden on eligible students and their families helping them
    secure financial aid while protecting taxpayers. FSA is also
    charged with serving students across the full lifecycle of
    student aid. As you know many millions of borrowers already are
    in repayment, and we're making changes to better serve them.
        For example, the Department of Education recently announced
    dramatic changes to the public service loan forgiveness program
    that FAFSA will now carry out. We intend finally to fulfill the
    program's promise to secure loan relief for service Members,
    teachers, nurses, police, firefighters, and others who have
    chosen to put community over self.
        We're also reviewing and improving other special
    forgiveness programs such as total and permanent disability.
    The Department is considering ways to improve these programs
    through the ongoing negotiated rulemaking process, and we're
    collaborating with other Federal agencies by leveraging data
    matching to streamline or automate loan forgiveness.
        In addition to better meet the needs of everyone who owes
    money on their student loans, we just successfully secured
    contract extensions for the loan services who will continue to
    work with us over the next 2 years. This is a milestone because
    for the first time we've secured new performance and
    accountability metrics that require servicers to put borrowers
    ahead of their own bottom lines, including penalties to make
    sure they do so.
        We look forward to working with those servicers that
    stepped up and grasped the shared vision of our
    responsibilities here. We will also include transparency by
    expanding required data reporting but let me say here that it
    was not I, but our negotiating team that did great work to
    secure these teachings that benefit borrowers with no per
    account price increase for taxpayers.
        To ensure accountability, FSA has created an office of
    enforcement to boost oversight of schools and reduce risks for
    students and taxpayers. To do this we will work closely with
    our colleagues in the Department, with Federal partners such as
    the FTC, CFBP, Justice Department, and Treasury, and with our
    State partners as well.
        We will also listen and learn from the community groups who
    advocate for students and borrowers. These relationships will
    help us achieve the goals that you and the Congress have set
    for us. Above and beyond all this work however looms an
    overriding challenge unique to the coming year--the
    unprecedented task of returning tens of millions of student
    loan borrowers back into repayment after a pause that was
    extended multiple times over almost 2 years.
        During this time borrowers generally have not been required
    to make regular payments, have been subject to zero percent
    interest, and if in default had collections stopped on their
    outstanding loan balances. In August the Department announced a
    final extension of these pandemic relief measures until January
    31, 2022.
        We know this will not be an easy transition for borrowers
    or loan servicing partners, or any of the other stakeholders
    involved in the repayment process. This is a defining moment
    for FSA, and it's crucially important for millions of Americans
    that we succeed. We're working to execute a comprehensive plan
    to combine elements of borrower outreach; servicer hiring,
    training, and preparation; policy enhancements and oversight to
    help borrowers effectively manage the process of returning the
    repayment.
        The core of our plan is clear communication, quality
    customer service, and targeted support for those having trouble
    making their payments. We and our servicers are engaged in
    informing borrowers about this deadline of what is expected of
    them. We ask you to help us spread the word so nobody is
    surprised or unprepared. We want to be sure borrowers know
    their options, such as applying for an income driven repayment
    plan to make their monthly payments more affordable.
        We also encourage borrowers to sign up for our auto debit
    program which is the easiest way to make their current monthly
    payments. There's nothing abstract about the challenges we
    face. If we're to succeed as a nation we must answer the call
    for millions of Americans who depend on Federal student aid as
    a path forward to better their lives.
        As each borrower succeeds, we all succeed. This idea is
    engrained in the mission of FSA which at its core is to enable
    the American dream. We appreciate your help and support as we
    move forward together to this end. Thank you, and I look
    forward to answering your questions.
        [The prepared statement of Mr. Cordray follows:]

                     Prepared Statement of Richard Cordray

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. Bonamici. Madam Chair, you are muted.
        Chairwoman Wilson. Thank you, Mr. Cordray, thank you for
    your testimony. Under Committee Rule 9(a) we will now question
    witnesses under the five-minute rule. I will be recognizing
    Subcommittee Members in seniority order. Again, to ensure that
    the Members five-minute rule is adhered to, staff will be
    keeping track of time, and the timer will show a blinking light
    when time has expired.
        Please, please be attentive to the time. Wrap up when your
    time is over, and remute your microphone. As Chair I now
    recognize myself for five minutes.
        Mr. Cordray, I applaud the actions taken to restore faith
    in the public service loan, however for many borrowers 10 years
    is too long and they can't wait that long for relief. What
    would be the impact of providing forgiveness on a tiered basis,
    for example, by allowing borrowers to have a portion of that
    debt erased for every year of qualifying service?
        Mr. Cordray. Thank you, Madam Chair. I appreciate the
    question. And let me start by saying that of course Congress
    passed the law that provides for a 10-year timeframe, and
    Congress could change that timeframe if Congress sees fit. It
    wouldn't be for me to change that timeframe, although we'd be
    happy to provide technical assistance and input into what the
    operational effects of that might be.
        We are working to implement the changes that are being made
    in the program currently, important, dramatic changes that are
    going to benefit, as we say, all the people who deserve public
    service loan forgiveness but haven't had it in the past. Those
    are service Members, police officers, firefighters, you know
    people who have really stepped up during the pandemic and put
    themselves at risk for the benefit of the rest of us.
        And so whatever changes you might want to make in that
    program we'll be happy to work with you to understand what they
    are and give you whatever input we can to be of help to you.
        Chairwoman Wilson. Thank you. I drafted a bill to address
    that, so you should--we'll enlist your help in finishing that
    product. Also, can you explain to us what is Operation Fresh
    Start?
        Mr. Cordray. So, I don't know that there's a specific
    Operation Fresh Start. There are policy matters under
    consideration at the Department as to what the effect of the
    repayment, restart that's happening after January 31, 2022,
    will be on defaulted borrowers.
        It is understood that delinquent borrowers will be returned
    to current status and will move forward to try to put them in
    the right position to succeed in returning to repayment. As for
    defaulted borrowers, those are matters that are under
    consideration right now, and I don't have more for you on that
    at this point.
        Chairwoman Wilson. Thank you. Studies have shown that
    disparities in student loan debt are deeply rooted in racial
    wealth disparities. What is FSA's plan for addressing racial
    and social economic disparities and student loan default and
    negative amortization?
        Mr. Cordray. So in general you know we're looking and
    looking carefully at how we can improve the repayment programs
    here. As you mentioned at the outset there's more than 40
    million Americans who owe money on student loans. And when you
    think about 40 million Americans and their families, we're
    getting to half the population of this country, so it's a
    major, major issue.
        As you say correctly, the number of people who are in
    default on their loans, or people who have having trouble
    repaying their loans, there is some racial inequity in those
    numbers we believe. However, what we want to do here is to
    administer this program fairly to make the process as easy as
    possible for borrowers to succeed, which ultimately will
    benefit taxpayers because what could be repaid will be repaid.
        And what is more difficult, there are programs for that,
    such as income driven repayment, and other programs that
    borrowers should get signed up for, and we're working hard with
    our servicers to make sure that borrowers know those options,
    and then servicers make it as easy as possible for people to
    access those options, and we've made some changes at the
    Department to accomplish that as well.
        But we're keenly aware of what you say about the
    differential effectiveness on American people, and we want to
    make sure that the program works as well as it can, and we
    think there's lots of room for improvement here.
        Chairwoman Wilson. OK. Reportedly President Biden has asked
    to prepare a memo on the President's legal authority to forgive
    student loan debt. What is the status of that memo, and when
    it's finalized, will it be made public?
        Mr. Cordray. So I think it's widely known that there have
    been legal memos prepared across the government, and that the
    White House has been taking them under consideration, and
    that's a matter for the White House to determine, obviously not
    for me. Whatever is determined, we will implement it. I do
    think that student loan forgiveness helps many worthy
    borrowers, help get back on their feet.
        But we will see what happens, and whatever it is we will
    implement it as best we can, and as smoothly as possible for
    borrowers and taxpayers.
        Chairwoman Wilson. Do you know when that will be made
    public? And do you have any timelines from the White House?
        Mr. Cordray. I do not.
        Chairwoman Wilson. OK.
        Mr. Cordray. Madam Chair.
        Chairwoman Wilson. Thank you, so much. Thank you. And now I
    will yield to our Ranking Member for his questions. Dr. Murphy
    of North Carolina.
        Mr. Murphy. Thank you, Madam Chairman, I'll just turn up my
    volume here. Thank you for the insightful questions that you
    had. Let me Mr. Cordray appreciate your coming on today. Let me
    just run a couple things by you. As you are aware through the
    CARES Act, an executive action, student loan buyers--borrowers
    rather, received significant relief since March 2020, and it
    was significant relief in a very bipartisan act of Congress.
        But, in addition to the payment pause, borrowers seeking
    forgiveness under PSLF have moved nearly 2 years closer to
    forgiveness because such payments have been counted toward
    their requirement. This was a significant benefit for these
    borrowers, would you agree?
        Mr. Cordray. Yes, I believe it is.
        Mr. Murphy. Great. I mean I do, too. I think it's a major
    benefit for those borrowers. Is it reasonable then to argue
    that particularly with respect to those who did not suffer
    joblessness, such borrowers are in a better position
    financially in relation to their Federal student loans than
    they were prior to the pandemic? Would you agree with that?
        Mr. Cordray. I think it's very hard to say on that question
    just because the pandemic has affected many public service
    employees. There are a lot of jobs that have been cut, or
    people have had their hours cut back because of the budget
    problems that we all experienced early in the days of the
    pandemic. Congress provided significant relief that I think
    helped State and local governments, and the Federal Government
    in various respects, and that has staunched some of the damage.
        In terms of whether borrowers are in a better position
    today than they were before the pandemic, that's going to vary
    dramatically from one community to another, and one household
    to another.
        Mr. Murphy. Sure. I would not disagree. I would just submit
    however that the vast majority of individuals who have still
    stayed employed did not have their hours cut back, and they're
    in a better position. So the reason I ask these questions is
    because the Department has recently announced a major overall
    of the PSLF program using authority provided through the
    Secretary under the HEROES Act of 2003.
        And so under this authority the Secretary may waive or
    modify any statutory or regulatory provision applicable to the
    student financial assistance programs under Title IV of the HEA
    to ensure that recipients of student financial assistance under
    Title IV of the Act who are affected individuals, which are
    those who suffered direct economic hardship as a result of a
    military operation or national emergency, but are not placed in
    a worse position financially in relation to that financial
    assistance because of their status.
        Is that correct is your understanding of what that
    statement says?
        Mr. Cordray. It's my understanding that the HEROES Act
    which was passed of course by Congress, does give the Secretary
    substantial authority here, and that was exercised, as well as
    other authorities that are granted to effectuate this relief on
    the public service loan forgiveness program. Yes.
        Mr. Murphy. So we agree that there's heterogeneity in what
    all of our programs, and all that our borrowers are facing, and
    that a one size fits all approach is probably not the actual
    correct approach. Would you agree?
        Mr. Cordray. You know, I think that's a broad statement. I
    would like to know specific instances. I think sometimes a
    broad approach is simplest to implement, but sometimes a
    nuanced approach is much more congruent to the situations of
    individual families and households and communities, so it
    depends.
        Mr. Murphy. Yes, I would agree. Madam Chairman I'll just
    take a point of order here. My clock seems to have frozen, and
    I don't want to take off my time, we're all frozen in time
    here, so.
        Chairwoman Wilson. You're frozen. We gave you a lot of
    time.
        Mr. Murphy. Well I don't want to, I mean I don't want to
    talk for the sake of talking, I just want to abide by the
    rules. So let me go on just to another question. Mr. Cordray,
    President Biden has made it clear that forgiving student debt
    is a top priority for his administration and stated on multiple
    occasions he would sign a bill forgiving $10,000.00 in student
    debt for all borrowers if Congress wants it sent to his desk.
        Do you support this policy? Has anyone in the Department of
    Education asked you or your team to process to forgive
    $10,000.00, or some amount for all borrowers, or are there
    other forgiveness plans that you have undertaken as part of the
    process?
        Mr. Cordray. So just to reset my position here, that's a
    policy decision. I have an operational job. My job is to take
    whatever policies are adopted, whether by Congress, of course
    in the first instance through statute, or the Department
    through regulatory authority, or authority given by Congress,
    and make sure that's carried out effectively.
        We have our hands full to do that job, with all the various
    things falling on us right now including return to repayment as
    you noted at the outset is a major, major challenge.
        Mr. Murphy. Sure.
        Mr. Cordray. So I would just defer on the question of what
    my personal preference is here.
        Mr. Murphy. All right. So you don't have a personal
    preference, and so if the President said everybody gets
    $10,000.00 off, you just do your job and implement it, correct?
        Mr. Cordray. I think if that were the decision, it would
    benefit many, many borrowers who are otherwise in trouble, some
    of whom never finished college, so never got the benefit of the
    bargain there, and so I can understand why that would be
    considered important, and we will see what happens, but it is
    not my decision to make. I just want to be caution on that.
        Mr. Murphy. Yes, and I say to those individuals who didn't
    finish college is that was a risk that they took, and they're
    still just because they didn't finish college doesn't mean they
    didn't have their risk. This blanket forgiveness stuff,
    especially being paid by people who never even went to college,
    I think is exceedingly unfair.
        So let me just ask you a quick question. Do you have an
    estimate by any chance if we did implement this $10,000.00 per
    borrower forgiveness, what it would cost the taxpayers of the
    country?
        Mr. Cordray. I do not. I'm sure people are preparing
    various estimates of that, but my job is to implement the law
    and the policy as it's established. That is not yet a policy
    that's been established.
        Mr. Murphy. Yes.
        Mr. Cordray. And so I'll wait and see on that.
        Mr. Murphy. Yes, so from my understanding the estimates are
    about $373 billion dollars, you know the Nation goes further
    and further in debt these days, and so just problematic. I want
    people to get out to work and not be overrun by debt, but
    there's also a part about personal responsibility that when you
    sign on the dotted line you know what you're putting forth.
        There's also responsibility from our institutions to not
    ruin our citizens. So I'm over my time, thank you Madam
    Chairman and I will yield back.
        Chairwoman Wilson. Thank you, thank you, thank you, Mr.
    Ranking Member, Dr. Murphy. Ms. Jayapal, our progressive
    champion, welcome.
        Ms. Jayapal. Thank you, Madam Chair. Appreciate it and
    thank you so much Mr. Cordray for everything you've been doing,
    and everything I know that you are going to do. Federal student
    aid is intended to enrich underserved students, but sadly for-
    profit colleges have been more interested in using these funds
    to pad their pockets in exchange for student loan debt and
    unusable degrees.
        63 percent of low-income graduates from these institutions
    will never earn enough in their lifetime to be better off than
    a high school graduate; however, by simply enforcing existing
    laws to hold for-profits accountable, and make them ineligible
    for Federal student aid, students and taxpayers won't have to
    endure these enormous costs.
        The proliferation of predatory for-profits can be traced
    back to their ease of access to Federal student aid. I'm going
    to be reintroducing my bill, the Students Not Profits Act, to
    stop for-profits from abusing these funds. But the Department
    of Education already has brought authority to act on its own,
    provisional program participation agreements are temporary
    certifications, as you know, that FSA gives to schools to work
    toward meeting Federal student aid standards.
        Predatory colleges are not entitled to student aid
    therefore these agreements should be limited. Will you ensure
    that provisional agreements are not treated as entitlements by
    giving very clear guidance on what factors make a school
    eligible for one?
        Mr. Cordray. Thank you for that question, and it touches as
    you know on a range of areas. So I'll try to give you a
    response that is not simple, but if it goes on too long feel
    free to cut me off at some point, OK? Look everybody probably
    knows the history. When I was the Director of the CFPB, we saw
    two major chains of for-profit colleges, the Corinthian
    Colleges set of schools and ITT, that we could see.
        We had the data. They were failing students. They were not
    keeping their promises to students. They were abusing the
    Federal student aid programs. We took action against them, and
    both of them were shut down. And there were many, many
    students, many thousands of students who were affected by that
    and have gotten student loan relief as a result under the
    closed school discharge provisions, and so forth.
        At FSA we have just created an Office of Enforcement. It's
    actually reinstituting something that was done 5 years ago that
    was rolled back under the previous administration. I think it
    is better for taxpayers, better for the public, and it will be
    better for borrowers if we have strong oversight over these
    programs around the country.
        Now let me just say it doesn't target a particular category
    of schools, as between for-profits, non-profits, public
    schools, but we will go where the risk is greatest and where we
    see people failing borrowers, where there are high cohort
    default rates, whatever school that is.
        We will look at that and go after that. If there are high
    delinquency rates, if there are other ways in which these
    schools are failing borrowers, it may be--and a lot of data
    would suggest that will be a more frequent problem for-profit
    schools. If so, those are the ones we will target, not because
    of their status, but because of what their performance is for
    borrowers and taxpayers.
        And I think that's the right approach, but we'd be happy to
    have the input from you all as we develop that office and we
    set its priorities about what the right way is to handle this.
        Ms. Jayapal. We'll followup for sure with you on that
    because we have some thoughts on that. I guess you know just
    following-up on that let me just say one of the things that's
    really important to us is that schools face repercussions if
    they violate their provisional agreements because as you know
    the Department never in its history has actually revoked
    provisional agreements when they've been violated.
        And so that is going to be very, very important for us, and
    I think you know the other thing that I want to just ask you
    about. I have limited time. One of the requirements for
    institutions to receive direct loans includes the timely
    submission of financial reports, but many fail to do so. And
    the law clearly requires those audits before an institution can
    originate loans, and yet to date the Department has never
    denied their eligibility for direct loans. So will the
    enforcement unit that you're setting up increase that
    accountability for participation in the direct loans, and other
    types of Federal student aid?
        Mr. Cordray. It's an excellent question. It's part of the
    answer that I was starting to give that I didn't get to, which
    is this. You know schools need to be--they need to have
    agreements that direct their performance, and they need to be
    held accountable for that performance. And there need to be
    protections for taxpayers here, whether it's posting of letters
    of credit, which is appropriate in certain instances, whether
    it's signature requirements.
        These are all things we're looking at; these are all things
    that probably should be used more substantially than they have
    in the past. We will look at those things. Again, we'll be glad
    to take input from you all on that, but we do think the schools
    can't just walk away from their obligations, leave taxpayers
    holding the bag, and anybody could think that's a fair and
    appropriate system.
        Ms. Jayapal. Great. And I hope you'll make these things
    transparent as well, you know in terms of warning letters and
    advisory opinions, so that students can be aware of their
    school's standings. Thank you so much. Madam Chair I yield
    back.
        Chairwoman Wilson. Thank you. Thank you so much. Mr.
    Grothman from Wisconsin you're live.
        Mr. Grothman. Good thanks. Can you hear me?
        Chairwoman Wilson. Yes, we can hear you.
        Mr. Grothman. Good. OK. Thank you, Mr. Cordray, for coming
    on over. First of all, the Office of Financial Student Aid is
    in charge of producing reports to Congress on the Department's
    experimental sites.
        One of the sites that I'm interested in is called 'Direct
    Loan Program Limiting Unsubsidized Loan Amounts.? That site was
    created in 2011, and the Department has yet to submit a report
    to Congress on its results, despite a clear statutory mandate
    to do so. Earlier this month Ranking Member Foxx and I sent you
    a letter to the Department requesting the overdue report, and
    we haven't even received an answer yet.
        Will you commit that you will fulfill your statutory
    mandate and submit a report on this experimental site by next
    week?
        Mr. Cordray. So let me say that to the extent that is the
    commitment that you think was made and not fulfilled going back
    to 2011, that's 10 years of the Department not doing that, and
    I've been here now for a few months, and I have not heard of
    that before. What I will be happy to do is take that back
    within the Department, talk that through, and get you an answer
    to your question which it seems to be you deserve.
        If in fact what you're correctly stating is a statutory
    requirement that hasn't been met over the past 10 years we will
    understand why that has been so, and we will look to make sure
    that we're fulfilling all statutory requirements that we're
    expected to fulfill. So I take that seriously, and we will take
    that back and we will get you an answer. Whether we will get
    you a report within a week, depending on how difficult and how
    comprehensive the report would be, I can't guarantee that.
        That's the kind of thing that we will work through with
    your office as we followup on your question if that's OK.
        Mr. Grothman. Thank you. Second thing on a staff call you
    said that the Office of Federal Student Aid works with the
    Consumer Financial Protection Bureau to monitor Federal student
    loan servicers. During the conversation you noted that you were
    unaware if there was a formal agreement in place such as a memo
    of understanding, or something more informal, and that you
    would check on that.
        Do you know is there a memo of understanding between FSA
    and CFPB, and if so, what information does the FSA share with
    the CFPB and vice-versa?
        Mr. Cordray. So my understanding is that the proper
    approach here is one Federal Government, and that different
    agencies in the Federal Government that have overlapping
    responsibilities should help one another in service of
    fulfilling what ultimately are objectives that were set by
    Congress in the law.
        All right. So we want to carry out the law as you gave us
    most effectively. Sometimes that's done through memorandums of
    understanding when there's formality that is needed. For
    example, when I was head of the CFPB we were required by law to
    have a memorandum of understanding with the Federal Trade
    Commission. We will be looking at those situations.
        Other times the agencies just collaborate and cooperate on
    a more informal basis. We will look at those situations and
    determine what's appropriate, and if your office wants to give
    input into that we will be happy to hear that from you.
        Mr. Grothman. OK. Is there a memorandum of understanding
    there, do you know?
        Mr. Cordray. Again it's complicated because there are
    different issues. There might be complaint intake and
    resolution. There might enforcement and oversight, there are
    different aspects, but we can get you a very specific answer on
    that if you would like.
        Mr. Grothman. OK. Finally, where is the statutory authority
    for FSA--where in the statutory authority for FSA does it allow
    you to cede your responsibility and give authority to another
    agency? OK?
        Mr. Cordray. I'm sorry go ahead.
        Mr. Grothman. Where in HEA, does it authority CFPB to
    exercise authority over Federal loan services, or take action
    against them? And I don't think it does. So you and Secretary
    Cardona are responsible for running FSA and overseeing the
    Federal contractors.
        Despite partisan policy wishes, the statutory language is
    clear, and your performance-based metrics are based on your
    work in FSA, and not handing your work to another agency. Do
    you believe that's so?
        Mr. Cordray. Yes. I'd frame it a little differently OK. I
    don't think that we should hand our work to another agency.
    That wouldn't be appropriate. We have statutory authority to do
    certain work, and we need to carry it out, and we will. The
    CFPB also has its own statutory authority, and they have work
    that they need to carry out, and they will.
        Sometimes those areas of work will overlap, and when they
    do overlap the right way for us to handle it so it's not to
    duplicate efforts for taxpayers, or waste effort, is to
    coordinate and to consult closely together so that we get the
    best bang for our buck collectively where there is overlap. So
    that would be how I would frame it I believe.
        Mr. Grothman. OK. It's not like a relationship say with FTC
    because that relationship is authorized under Higher Ed. Is
    there any reference to CFPB?
        Mr. Cordray. So again, I wouldn't only look at the higher
    education statutes, I'd look at the CFPB's own statutes. They
    do have authority. I recall it well. I was the director of that
    agency. They have authority over student loans to a
    considerable degree. We worked cooperatively with the
    Department of Education during that period, and vice versa, we
    will work cooperatively with the CFPB where there are areas of
    overlap.
        And again, I'd be happy to followup with you further on
    that as you wish.
        Mr. Grothman. And we'll give you a followup question thank
    you.
        Chairwoman Wilson. Thank you, thank you. Ms. Leger
    Fernandez, welcome.
        Ms. Leger Fernandez. Thank you, so much, Chairman Wilson
    and Ranking Member Murphy. Also, thank you, Mr. Cordray for the
    excellent work you're doing on student loans. It's very
    difficult, it's a very difficult issue, and I think that the
    path you are leading is so helpful to so many of our students,
    and what we need to have happen with regards to the you know,
    FAFSA, which I still am filling out for my students, my
    children.
        I wanted to get your perspective on the importance of
    financial fitness for students. You know, understanding
    important financial concepts like saving for retirement,
    managing student loan repayments, investing is really
    fundamental to closing the wealth gap in our country.
        Tomorrow I'll be introducing the bipartisan Financial
    Fitness Act with my colleague, Congresswoman Spartz, and I will
    require the Secretary of Education to create a public financial
    resources online portal to help students build these financial
    competencies. Could you speak briefly about whether the ability
    and the lack of--or the lack of knowledge of important
    financial concepts makes it difficult for students to stay on
    track with loan repayments, and increase their wealth in the
    long run?
        Mr. Cordray. Yes, and if I could let me just make a quick
    comment on the beginning of your question and then let me turn
    to your question which I consider quite important. It's very
    dear to my heart. The comment I would make as you said at the
    beginning that I'm doing excellent work. I've been here 6
    months. I work as hard as I can every day to do as much as I
    can.
        But I do very little myself. The people at FSA, the 1,400
    colleagues I have here I have found to be high performers.
    They're making a huge difference. They're taking on very
    significant challenges that the other questioners have touched
    on, and I'm sure will touch on further, and they're doing a
    terrific job, and I appreciate that, and I'm grateful for it.
        As to your question about financial fitness, this is
    something that's been near to my heart. I will tell you for 20
    years, actually 30 years. It goes back to in the legislature I
    pushed for a financial fitness provision in the State of Ohio.
    Later at CFPB I was the Vice Chair of the Financial Literacy
    Education Commission, which is the Federal Government set of
    agencies that brings together all the Federal Government
    departments and agencies that deal with financial fitness, and
    we work on a number of initiatives.
        I've now testified in front of that group for the first
    time in 4 years, now that I'm back here, last month. I'm
    looking forward to working with them. There is much we can do
    as we say to help families understand what their obligations
    are, what their risks are, and making good choices, with eyes
    wide open, before they get into a problem. And the College
    Scorecard, which is something we pioneered when I was the
    Director of CFPB, and by the why Rohit Chopra was our student
    ombudsman, now the new Director of the CFPB.
        He got that accomplished with the Department of Education,
    and something we've built on over the years, which again gives
    his family the right information when they need it to make good
    choices, and that will make families better off in this
    country. But these are hard matters as you say, they're
    complicated issues. People's understanding of money is not
    always as we would like.
        Ms. Leger Fernandez. Yes.
        Mr. Cordray. And it's something we need to work at every
    day to make this country stronger.
        Ms. Leger Fernandez. Thank you. And you know we use the
    term financial fitness in a housing organization I help lead
    for 20 years, so that we talk about it not as illiteracy, but
    it's what makes us strong.
        Quickly, if FSA under your tenure has prioritized improving
    the public service loan forgiveness program, I know you've
    talked to borrowers across the country and started a negotiated
    rulemaking to make permanent changes. You also recently
    announced a limited time waiver, or some of the eligibility
    criteria. Can you talk to us about what steps FSA is taking to
    communicate with borrowers about this, and why it's so
    important to make sure that student borrowers know about this
    benefit and can apply?
        Mr. Cordray. I appreciate that question. It's something
    we're working hard on right now. I go back to the old saying,
    if a tree falls in the forest and no one is there to hear it,
    does it make a sound? You know we have some great advances here
    on the public service loan forgiveness program. If people don't
    know about them, or don't know to take advantage of them, many
    of them will be wasted and there will be missed opportunities
    for people.
        We don't want that to happen. We have already begun
    communicating to I believe to more than 500,000 current
    borrowers, and we will be reaching out to all borrowers who may
    or may ever have applied before for public service loan
    forgiveness or may in the past have applied and be told it
    doesn't apply to you, but now there's new, broader criteria.
        We will be working to get that message out. But by the way
    you all can help us get that message out. Your constituents
    listen to you. They respect you. They know you know things. And
    if you tell them this is a new day, take a new crack at it, see
    what you can find out for yourself, direct them to us and we
    will do our best to serve them. We would appreciate that help.
        Ms. Leger Fernandez. Well, thank you very much. My time has
    expired, and I yield back.
        Chairwoman Wilson. Thank you. Thank you so much. We do
    want, Mr. Cordray, I do want him to know that we totally
    support the 10,000.00-loan forgiveness from the President of
    the United States, so that's the Chairman of the Higher
    Education Workforce, Labor and Workforce Committee, Education
    and Labor Committee.
        Mr. Cordray. I'll communicate that back to the Secretary
    and the people at the Department with your blessing, Madam
    Chair.
        Chairwoman Wilson. I thank you. And we look forward to his
    memo, and when it is being published to the public. And now Ms.
    Banks of Indiana. Ms. McClain?
        Mrs. McClain. Thank you, Madam Chair. And as always, you're
    looking nice today. I appreciate you being here, and I
    appreciate the opportunity to ask some questions. Mr. Cordray
    as you spoke earlier is you know you want to protect the
    taxpayers, and you want there to be some accountability, and I
    think we're all in agreement on protection for the taxpayers
    because, at the end of the day, the government cannot give one
    dollar of which it does not take from someone else.
        So with that said, can you help me understand it looks like
    in January roughly 45 million student loan borrowers, excuse
    me, will return to the loan payment process. After almost 2
    years of not doing so because of the pandemic and whatnot.
        But recently under the Biden administration we also have
    three of those nine loan servicers exit the industry. So I'm
    curious of the--I have a couple of questions first. Of those
    three that have exited the industry, what is the dollar amount
    of the loans that they service?
        Mr. Cordray. Well I'll give it to you the way I'm most
    familiar which is the number of accounts that we're talking
    about is a little more than 15 million, so it's a very
    significant part of the portfolio I would agree on that.
        Mrs. McClain. Thank you. Who will service those accounts
    now? Will they go into a new company? Will they go into the
    other six remaining? How is that going to work?
        Mr. Cordray. So I can give you a long and detailed answer,
    and I will if you like. The short answer is there are other
    servicers who are quite eager to be participating in this
    program and to have more accounts, and they are stepping up
    here. So for example, the Granite State portfolio is moving to
    Ed Financial. The Navient portfolio is moving to Maximus.
        The PHEAA portfolio is the largest, and therefore it's
    having to move to several servicers, but there is great
    interest in that. Some of those accounts will move to
    (inaudible), et cetera. I can get that to you.
        Mrs. McClain. Thank you, sir. Thank you. If you could
    provide a written list of who's servicing those debts that
    would be helpful. And have those already been determined?
        Mr. Cordray. So I will say that much of it is determined,
    some of it is a further work in progress, and the reason some
    of it is a further work in progress is with the PHEAA
    portfolio. As we transfer accounts to certain other servicers,
    we want to kind of keep an eye on the performance.
        Mrs. McClain. Sure.
        Mr. Cordray. And we want to direct more accounts to those
    that are performing better so that I can't give you all the
    determinations yet, because we're at a snapshot in time.
        Mrs. McClain. When do you think you'll be able to give us
    those determinations because in 3 months, or 4 months,
    depending on how we count, the people who have the loans will
    have to begin to write checks to these people.
        Mr. Cordray. Yes. What I've just stated gives you the
    answer to that for more than half of the borrowers we're
    talking about.
        Mrs. McClain. Which is wonderful, but.
        Mr. Cordray. Yes. I'll find out. We will give you; we will
    be happy to give you what information we have currently, and
    what information is not yet known, and keep you updated on that
    over time since that's an interest of yours if I'm hearing you
    correctly.
        Mrs. McClain. Well, I think it's an interest of mine, and I
    think it's an interest for the taxpayers wanting to make sure
    that we hold you know government accountable to making sure
    that government is really good at spending money.
        Mr. Cordray. That's fair enough. We agree on that. We agree
    on that.
        Mrs. McClain. We're really--eh, we're working to have a lot
    of stuff when it comes to loan repayments and getting our
    taxpayer moneys back. So one of the things I think we should be
    cognizant of, and I would say I know this from the 30 plus
    years that I've actually spent in business, having to sign the
    front of checks, not just the back of checks is before we go
    out and give a bunch of money, let's make sure that we have the
    other end of the stick, which is let's also make sure we have a
    really good solid program to recoup the money of which the
    taxpayers actually deserve.
        Mr. Cordray. I think that's where you and I agree, and
    maybe all of us can agree to the extent we're spending money,
    we should be making sure we're getting value for that money. If
    we're not getting value for that money, we should not be
    spending it. If we are getting value for that money, we can
    then you know, perhaps debate about it in the next.
        Mrs. McClain. I get a little bit--I like the political
    speak, and I appreciate that, but I'm not talking about value
    for money. What I'm talking about is if I have a home loan, if
    I have a mortgage, and I say to the bank give me $200,000.00,
    the bank also has a really clear, precise contract of which I
    need to repay that loan. I can't go back to the loan company
    and say hey, but I'm getting a lot of value from living in the
    house.
        That doesn't really pay the bills, right? So as much as you
    and I appreciate the value for money, I'm going to take it a
    step further to protect the taxpayers. It is definitely
    honorably to give this money. We've got to make sure we have a
    solid plan to recapture the loan repayment, so I look forward
    to it and thank you Madam Chair.
        Mr. Cordray. I appreciate your point, and I understand it
    thank you.
        Chairwoman Wilson. Times up.
        Mrs. McClain. Thank you.
        Chairman Wilson. He can followup in writing to you.
        Mrs. McClain. Thank you.
        Chairman Wilson. OK. Thank you so much. And now
    Representing Manning, you're live from North Carolina.
        Ms. Manning. Thank you, Madam Chair, and thank you, Mr.
    Cordray for being with us today. During the Obama
    administration the Department worked cooperatively with State
    law enforcement agencies like the states Attorneys General, to
    investigate and hold unscrupulous for-profit colleges
    accountable.
        This priority, like many other policies designed to protect
    students and taxpayers, was reversed under Secretary DeVos. And
    I want to applaud the FSA for announcing the reinstatement of
    its enforcement unit on October 8 to strengthen oversight of
    predatory institutions.
        I am working on a proposal to codify the enforcement unit
    so that it cannot lay dormant under another administration. I
    also want to comment the FSA for working with the Federal Trade
    Commission to increase interagency collaboration and
    coordination of enforcement actions against predatory for-
    profit colleges.
        So could you talk to us about the multi-level strategy that
    needs to be used to hold predatory for-profit institutions
    accountable, and perhaps talk about additional partnerships
    that you believe would be helpful in this work.
        Mr. Cordray. Sure. And again, this is as you say, a very
    important development, and it was an important policy change,
    you know, the previous administration had basically blocked
    states from having any effective role here in overseeing
    companies that have a significant impact on many, many
    thousands of people within their states.
        And it seemed to me that we should be working together.
    None of us has enough people to do all the oversight of these
    programs that we would like to do, and that taxpayers should
    demand. And if we work together and we pool our efforts and our
    resources, we're going to do a better job. That's what we
    intend to do here.
        So, it's not that we're trying to get other people to do
    our work for us. They've got work they want to do. We've got
    work that we need to do, and some of that work overlaps, and if
    we can do it together, that's effective. For example, I will
    say right now that we have accounts, and the previous question
    had asked about this, that are transferring from one servicer
    to another. We want to make sure that is going smoothly.
        There are a lot of State officials who want to make sure
    that's going smoothly as well. The CFPB wants that to be going
    smoothly as well. Some of this overlaps with their area. Right
    now we have FSA people overseeing those transfers together with
    working with CFPB officials, working with State officials from
    17 states I believe, to make sure that goes as well as
    possible.
        With that group of people working together we'll do better
    than any of us could alone, and that's a good principle for us
    to follow across the Federal and Federalist government of the
    United States it seems to me.
        Mrs. Manning. Thank you. I have a particular interest in
    the conversion of for-profits to non-profits by purchasing or
    collaborating with non-profit institutions because we have a
    situation involving that in my State of North Carolina. And the
    GAO recently investigated the process through which for-profit
    institutions convert to non-profit status.
        We found serious shortcomings, including the possibility of
    insiders taking advantage of non-profit institutions at student
    and taxpayer expense through a variety of different creative
    methods. The GAO also found a disparity between the Internal
    Revenue Service's approval of non-profit status and the
    Department's approval.
        So what steps has the Department taken to address the risk
    of insiders taking advantage of the converted institution in
    for-profit conversions as part of the change in ownership
    reviews? And can you talk a little bit also about what
    information, practices, and expertise could be shared by the
    Department with the IRS in their reviews of such conversions?
        Mr. Cordray. Sure. And by the way information sharing
    between FSA and IRS has really moved forward in a very positive
    way. They are working closely with us. That makes our work more
    effective, and we appreciate those efforts. To the point you
    made--and it's an insightful question about conversion status
    of these institutions.
        Let me just put it simply. If you or I had financial
    obligations, and we went to Court to try to change our name,
    and the Court let us change our name, that wouldn't let us get
    out of our financial obligations. And similarly, if you have a
    for-profit school that thinks that they're going to be treated
    more lightly if they convert the not-for-profit status, that's
    inappropriate.
        It is not consistent with the demands we should make on
    these schools, and we will scrutinize those conversions
    carefully, and we have the ability to deny them if they're not
    justified, and we have the ability to put conditions on them,
    again to make sure taxpayers are protected, to make sure
    students are protected, and we will do that.
        Mrs. McClain. Thank you. My time has expired. I yield back.
        Chairwoman Wilson. Dr. Foxx, our Ranking Member of the
    Committee, welcome.
        Ms. Foxx. Thank you, Madam Chair. Mr. Cordray the Committee
    has written several letters requesting information regarding
    the return to repayment and have yet to receive responses.
    Further, the Committee has received just a few briefings from
    our staff regarding this important issue, and we're left with
    either vague statements about incoming plans that have yet to
    be announced or false statements regarding when the repayment
    pause would expire.
        When Congress learns more about the Department's plans for
    this unprecedented operation from Politco, than it does from
    the COO of FSA, my question whether such lack of transparency
    is intentional or just incompetence. So I'd like to give you an
    opportunity to clarify this for me on the record, and I need
    quick answers please.
        Mr. Cordray on what date did the administrative forbearance
    go into effect--first go into effect?
        Mr. Cordray. You mean the payment pause? Is that what I
    would call the payment pause? You mean in March 2020 when the
    previous administration recognized the pandemic?
        Ms. Foxx. Just give me the date please. What date did the
    administrative forbearance first go into effect?
        Mr. Cordray. OK. So if you're taking about the payment
    pause, I'm not sure how you're defining administrative
    forbearance, that took effect in March 2020 when the
    declarations were made, and it was followed up quickly by the
    CARES Act.
        Ms. Foxx. What day was this clause first extended?
        Mr. Cordray. I believe it was extended multiple times under
    the Trump administration. I don't recall exactly because I
    wasn't in this position, but I believe it was again in
    November, maybe again in January, then it was extended under
    the new administration right away in January, and then once
    more, and we now have a final deadline of people will return to
    repayment after January 31, 2022.
        Ms. Foxx. So, what did the press release accompanying that
    announcement say about when the payments would restart?
        Mr. Cordray. Well, I assume, and recall that it correctly
    stated that this is a final deadline on the return to
    repayment, and that payments will start sometime after January
    31, 2022. Not before January 31, but anytime after. What
    happens with these payments just again, I don't mean to give
    you too much detail, but is that people don't all pay on the
    same day of the month.
        They're staggered throughout the month depending on you
    know a variety of things that allows us to process payments in
    a smoother fashion. So it's not the case that everybody will
    start paying on February 1, but everybody will start repaying
    after January 31, and they will all get notice of their
    specific date ahead of time so that they will know that.
        Ms. Foxx. Mr. Cordray, on April 3, 2021, we sent a letter
    regarding a report that was commissioned by FSA analyzing the
    true value of student loan portfolio to which your staff
    responded with a heavily redacted copy of the request document.
        I know you sent the response yesterday because Dr. Murphy
    said in his opening statement you know that response didn't
    answer our question. I'm asking again for the unredacted copy.
    Just saying the previous administration redacted it is not an
    acceptable answer.
        You have the report. You can share an unredacted copy. The
    Secretary testified before the Committee on June 24 and said
    he'd work with the Committee and shared what the Department
    has. Why is the Department hiding this report?
        Mr. Cordray. So again, that's a report that predates my
    time at FSA and the answer----
        Ms. Foxx. But you have the report, just release it. You
    have it. Release it.
        Mr. Cordray. Do you want me to answer your question? I'll
    be happy to answer it shall I?
        Ms. Foxx. Yes.
        Mr. Cordray. OK. So the response to you, which was not from
    me, but from others at the Department was that this report was
    released previously, and it was redacted by the previous
    administration, and we have now released the report again with
    the same redacted material that the prior administration
    provided, and that's our understanding of the appropriate
    response.
        If you want to have more followup on that, sounds like you
    do, I think the Department will be happy to have that
    discussion with you. By the way I'm also told--may I just, I'm
    also told that if you would like to have a briefing on the
    issues in that report, and on the financial underpinnings of
    it, people would be happy to do that with you and make that
    possible.
        Ms. Foxx. Let me ask my next question. Do you believe
    taxpayers should be aware about the true value of the student
    loan portfolio? After all, they are the ones who are ultimately
    on the hook for any unrecovered funds used to finance this
    program.
        Mr. Cordray. Again, I think we should all be aware of the
    accurate numbers about these things. There's some question
    whether the methodology used in that particular report, and
    there have been many other reports over the years, is the most
    accurate, and again people would be happy to brief you from the
    Department on the details of that, and we would offer that to
    you, and hopefully that would help cut through this a bit for
    you.
        Ms. Foxx. OK, now, Mr. Cordray we want the public to know
    what this is, not just to be briefed on it, and not be allowed
    then to share that information. You have the report. We should
    have it, if you don't like the methodology then you explain why
    the methodology is bad. Thank you, Madam Chair, I yield back.
        Chairwoman Wilson. Thank you, thank you, Dr. Fox. I'm sure
    there will be some followup on that subject. And now Chairman
    of the Committee, the distinguished Chairman, Dr. Scott.
        Mr. Scott. Thank you, thank you, Madam Chair, and thank
    you, Mr. Cordray for your hard work in Ohio and Consumer
    Finance, and now at Student Loans. The first question is the
    FAFSA form was redesigned and simplified a couple of years--
    several months ago to I guess about over a year ago.
        And I understand that there are some problems in
    implementing those changes. It seems to me that we should
    implement as much of that reform as possible without delay
    because otherwise the students will miss out on benefits,
    particularly enhanced Pell grant awards.
        Can you work with our staff to make sure that as much of
    that gets implemented as possible without having to extend the
    whole program?
        Mr. Cordray. Yes. Can I say a couple things about that, and
    first of all we very much appreciate that both the Future Act
    and the FAFSA Simplification Act many of you worked hard in the
    Congress to get those enacted, and they represent you know
    leaps forward in the FAFSA form process.
        It simplifies the form, should make it easier for people to
    fill it out, should get more access to Federal student aid, a
    clear picture for families of what they're getting into, and
    information sharing with the IRS helps us be much more
    efficient and effective about this.
        In terms of the current situation, where there's
    discussions in Congress about how to implement that, and when,
    and which pieces, we're happy to take our guidance from you all
    in the Congress on that. We have made it plain that you know
    this is a matter of cost for taxpayers and cost for borrowers
    about getting this implemented properly, and we want to make
    sure that we do that.
        And we also have said very frankly that we need more time
    because we have to replace a 47-year-old main frame system
    that----
        Mr. Scott. That's fine. You can either work with us to make
    sure we can get as much implemented as possible, so students
    don't miss out on the benefits.
        Mr. Cordray. Again, we want to make this effective for
    families and borrowers as quickly as possible. We will do as
    much as we can, as quickly as possible.
        Mr. Scott. I have other questions, so I assume you'll be
    working with our staff to make sure that we do that as quickly
    as possible. The Congress has given Department of Education
    broad authority to fine institutions that have refused to make
    systems to place limitations on their participation of Title IV
    and to seek recovery of financial losses against owners and
    executives of such institutions, but the Department of
    Education has been failing to do that, leaving the taxpayers
    and students to pay the price when institutions engage in
    fraudulent activities that leave them stuck with the bill.
        And in our hearing, we had in March a witness said we
    should use that authority. Let me just say that when I say use
    that authority against the owners and executives, I'm not
    talking about strict liability. I'm talking about triggering
    that authority when the executives have personal involvement in
    the fraud with document consideration, the seriousness of the
    fraud, and the amount of money the executives made off the
    fraud, taking that into consideration, how much they profited.
        And obviously if we did that it would deter future fraud.
    Is that something the Committee, the Department is looking at?
        Mr. Cordray. So I will say we have that letter from you. I
    heard you loud and clear on that, we see eye to eye on this. We
    absolutely agree. More needs to be done to prevent people from
    abusing these student aid programs from cheating taxpayers,
    from cheating students, that's part of why we're setting up the
    Office of Enforcement.
        We will look forward to keeping you apprised of our
    progress and dealing with the issues you raised in that letter.
    I think they are important issues, and we agree on the
    direction here, and I thought it was a good bit of a kick in
    the behind for us to make sure that we're moving down the road
    on this, and we will.
        Mr. Scott. Thank you. Mr. Cordray the next generation of
    financial services environment known as Next Gen would simplify
    the direct student loan borrowers access to information through
    a website. It was devised by the Obama administration and kind
    of left and not much happened. Could you explain the status of
    that? And I hope you have more to explain than you can in the
    little time we have left. I want to get in another question.
        So if you could provide in writing the status of that while
    I get to another question.
        Mr. Cordray. That's fine. We will provide you in writing.
    We have a lot of things we're doing, and they are going to make
    that much better for borrowers, and I'm exciting about what our
    team is coming up with. They're doing a great job on this, and
    we will be happy to give you all the details.
        Mr. Scott. And my final question is what authority does the
    Department have in things like reducing interest rates,
    allowing refinancing, and fixing the public service loan
    forgiveness. You've done a lot of work on that, and we want to
    thank you on it. But if you could give us--my time has expired,
    so you're going to have to do that as a followup and bring us
    up to date on how that's working.
        Another question I'd like would be the $10,000.00
    discharge. How much of that is non-performing loans, so the
    discharge here wouldn't really cost anything other than
    relieving us of the cost of servicing those loans, and whether
    or not what you are doing with the loan services to make sure
    they're doing their jobs, as students sign up in January, to
    make sure that they're signing up appropriately for student
    forgiveness, borrower defense, interest-based repayment and all
    of those, what kind of guidance you're giving.
        If you could do that in writing because I'm obviously over
    time, and I appreciate the Chairwoman's forbearance.
        Mr. Cordray. OK. Those are good questions, and we'll be
    glad to give you some good answers, and then you tell us if you
    need more all right.
        Chairwoman Wilson. Thank you.
        Mr. Scott. Thank you. Thank you, Madam Chair.
        Chairwoman Wilson. Yes. It would be helpful if you
    presented those questions in writing to Mr. Cordray's office so
    that he could followup with you in writing, those are questions
    that all of us would like to have answers to, so if the
    Committee would be so kind as to distribute that to all of the
    Members of the Subcommittee on Higher Education and Workforce
    Investment, we would certainly appreciate it.
        Mr. Scott. Will do, thank you.
        Chairwoman Wilson. Thank you. And now we want to welcome
    Mr. Bowman, you're the Vice President of this Committee, Vice-
    Chair.
        Mr. Bowman. Vice President sounds good, thank you, Madam
    Chair, really, I appreciate the time. Mr. Cordray, I have a
    little more airtime for you if you don't mind. Thank you so
    much for joining us today.
        As you know I'm a strong advocate for canceling student
    debt. And I recently joined several of my colleagues on the
    Committee in a letter led by Representative Omar calling to
    both President Biden and Secretary Cardona to release the
    student debt cancellation memo, we were told would be made
    available more than 6 months ago.
        The student debt crisis a racial justice issue. A recent
    report by the Education Trust described how student debt is
    steeped in systemic racism and exacerbated by racial inequities
    in wages, wealth, access to education, and more.
        Black borrowers often feel trapped in the vicious cycle of
    lifelong debt they cannot escape from, and many of them,
    especially black women, actually face more student debt today
    than they did when they graduated. The report called this issue
    Jim Crow debt, and highlighted the voices, experiences and
    perspectives of black borrowers which are far too often
    overlooked in our conversations about the student debt crisis.
        Researchers concluded that centering these perspectives and
    addressing the racial inequities in student debt requires that
    the Federal Government cancel all student debt. Mr. Cordray,
    how is the Office of Federal Student Aid actively centering and
    prioritizing the voices and experiences of black borrowers in
    your work, and how do you respond to the finding that
    eliminating debt cancellation would harm black borrowers the
    most?
        Mr. Cordray. So, I appreciate Representative Bowman the
    perspective you laid out in your question. And I agree with
    much of it, and by the way there's a lot of statistical data
    that I think supports various pieces of what you've said. One
    of the ways FSA can be most helpful here is we are an
    operational shop that has access to a great deal of data on
    Federal student aid, you know, all the data, and we use it to
    effectively manage the program.
        And to the extent we can provide that information to you,
    or to the Department, or to the White House if they're asking
    for it, we certainly do so. We want to inform the decisions
    that are made on this as much as possible.
        Again, decisions about general loan forgiveness are not my
    decisions to make. They will be made elsewhere. We will do our
    best to implement whatever is done. I do think that loan
    forgiveness for Americans where it's appropriate and justified
    makes a huge difference in their lives, gives them a chance to
    get sound footing and move forward and better their lives,
    rather than be stuck with this millstone around their necks,
    and where that's appropriate to do so, and there's authority to
    do so, you know we will enthusiastically implement that.
        And I hear you having that same perspective as well.
        Mr. Bowman. I appreciate that, and I would love for my
    office to be in touch with you so we can get access to some of
    that data that you've mentioned, so we can get a holistic, and
    a much better and more comprehensive understanding of the
    issue. So we will definitely love to work with you on that.
        And I had another question about Parent Plus loans. I've
    heard from many of my constituents that depending on how their
    Parent Plus loan was structured, they may not have benefited
    from the pause in payments during the pandemic and have been
    struggling to stay out of default all this time. Specifically,
    if a parent took out a Parent Plus loan before 2010, they could
    have come out of the Federal Family Education Loan Program,
    most of which were held by private lenders.
        Parent Plus loans also faced absurdly high interest rates,
    and exclusion from some income driven repayment plans. These
    parents, many of whom have faced extraordinary financial
    hardship and suffering during the pandemic don't get much
    attention when we talk about the student debt crisis, but they
    need our help.
        They should not have to push off retirement or face
    financial devastation just because they want to help their kids
    get an education. Is your office considering improvements to
    Parent Plus loans, and if so, can you describe your vision for
    these improvements?
        Mr. Cordray. Yes, again I'll just say that the issue of
    what to do about different types of loans. As you know there's
    a blizzard of different categories of loans under the program
    that have been developed over many years, and some of it gets
    to be quite complex.
        And actually in preparing for this hearing, we went over
    the issue of Parent Plus loans where I understand there's some
    dissatisfaction from some that didn't get all the relief that
    other loans got. And their reasons for that--I don't have time
    to necessarily get into in detail, but we are open to hearing
    more from you all about whether Parent Plus loans should be
    covered under this program or that program, and having a dialog
    back and forth, and we would welcome that certainly.
        Mr. Bowman. So would you say that your office is just
    beginning the process of sort of engaging around Parent Plus
    loans, and the strengths or weaknesses of them, and all of
    that? You are not yet considering improvements. You're just
    trying to get a better understanding of the complex nature of
    the Parent Plus loans as well as other loans?
        Mr. Cordray. I'd say that's mostly right, but not entirely.
    Certainly, people thought about Parent Plus loans when the
    payment pause was put in place, and then other forgiveness for
    public service loan forgiveness and the like. And it's always
    been a bit of a difficult edge of this in terms of what is
    included, what is not included.
        But I think there's an openness to further discussions
    about this and trying to think it through. So I don't want to
    say we're at the beginning of thinking about it, it's something
    that has come up you know, at various times. But I think
    there's still an openness to hearing more about it, nothing is
    closed at this point is my understanding.
        Mr. Bowman. Thank you, so much, Madam Chair, I yield back.
        Chairwoman Wilson. Yes. We would appreciate an answer to
    that question also in writing for the benefit of the Committee
    because all of us are interested in the Parent Plus, and
    unfortunately this hearing only gives you five minutes to
    answer such an important question.
        Mr. Cordray. I understand Madam Chair, you're piling up the
    homework for us, but we'll be glad to take it on, and we'll get
    it back to you as quickly as we reasonably can.
        Chairwoman Wilson. That lets you know how important your
    work is, and how important this particular issue impacts so
    many people. And we appreciate your cooperation. And now
    Representative Pocan.
        Mr. Pocan. Thank you, Madam Chair, I appreciate it. And
    thank you Mr. Cordray, and I just want to say thank you for
    your long commitment to public service as well. I appreciate
    that. I have a bill that I introduced back in 2013 that came
    out of the grass roots of my constituents, on refinancing of
    student loans.
        As you know we're kind of historically low interest rates,
    yet we've got a lot of people paying 6 percent plus interest
    rates on old loans, and we had introduced a bill to allow
    people to be able to refinance their student loans at the
    lowest available current rate. The idea being that would happen
    in the free market, but somehow it doesn't happen with student
    loans.
        And as you know it's not necessarily easy to do this
    process. Can you think of any reason why that shouldn't be the
    law of the land allowing people to be able to refinance at the
    lowest available rate?
        Mr. Cordray. So I've heard over the years various proposals
    along these lines from leaders like yourself in the House and
    the Senate that the interest rates are higher, that maybe
    they're higher than businesses and developers pay, et cetera.
    You know those interest rates are typically set by statute, as
    you know, and if they're going to be modified, they need to be
    modified by statute.
        We would be open to providing the kind of I think they call
    it technical assistance, or other data that we can provide that
    would be helpful to you in trying to determine what the impact
    is, but you know I would just say in general I've dealt with
    financial issues in Federal and State government for years and
    years. It's obvious that higher interest rates make it harder
    for people to climb out of debt.
        Lower interest rates make it easier. What's fair and what's
    appropriate, and what the right match is to some sort of
    Federal funds rate or something, is for you to determine, but
    if we can help you giving you data so that you can see the
    consequences are one way or another, we would be happy to try
    to provide that.
        Mr. Pocan. Sure. And I don't want to put words in your
    mouth, but you don't think there's any reason why that would be
    a problem to do that at this point?
        Mr. Cordray. No. Look any time you're talking about numbers
    and dollars, there is a problem. There's either too much, or
    too little, and it's for Congress to decide what's the
    Goldilocks right amount, not for me to decide per se. I may
    have thoughts about it, but that's not my role here.
        Mr. Pocan. Actually I'm asking you that very question as
    what are your thoughts around this. You are allowed to have
    thoughts, and I would love to hear them.
        Mr. Cordray. Yes. I'm allowed to have thoughts, but I don't
    want to get in front of you know the Secretary, or the White
    House, or others who have this decision to make. But frankly in
    this case it's you, the Congress, that has the decision to
    make.
        Look, higher interest rates put borrowers in a more
    difficult position. And lower interest rates would make it more
    plausible and feasible for them to pay off their loans. Again,
    that's a very obvious point. I'm not telling you anything that
    anybody doesn't know, but in terms of what the right level is,
    or whether it should be the fed funds rate or something else,
    again that's a policy decision for you.
        And if I were in the Congress, I'd be asking the question
    and trying to figure out myself, but I don't want to pretend
    that's my role.
        Mr. Pocan. No, I appreciate that. Thank you. So let me ask
    you another question about tuition creep. Has the
    administration discussed ways to try to address that? I know
    that's one of the issues that you know people seem to have is
    that the cost of higher education is going up at a faster rate
    than you know the consumer price index, or anything else, and
    because of that's putting an undue burden on folks. Have you
    guys discussed that issue at all?
        Mr. Cordray. You know that's been true for years. We saw
    that trajectory when I was at the CFPB. It was at that point
    for the first time that again Rohit Chopra our Student Loan
    Ombudsman, was able to point out that the total aggregate
    student loan debt had just exceeded one trillion dollars for
    the first time.
        And by the way it's already now at somewhere between 1.5
    and 1.6 trillion. In terms of why that is so, whether schools
    are charging too much, you know those are policy issues that
    you know people wrestle with. If we could keep a lid on the
    higher education costs that would make it easier to finance
    this program and make it easier on borrowers and their
    families.
        All the mechanics that go into that, including State
    government laws, Federal Government laws, and what oversight of
    institutions are. It's not really in my purview to tell
    institutions how much they can charge students, although
    obviously we get the back end of that which is people repaying
    the loans to pay those amounts.
        But I would say it's definitely a concern. Higher education
    costs have outpaced inflation. They have risen to very high
    levels. Are we pricing families out of the market? Are we doing
    that by imposing significant debt at the Federal level? These
    are serious issues, and worthy of serious consideration, and I
    urge you to keep pressing on them.
        Mr. Pocan. Thank you, Madam Chair. I yield back.
        Chairwoman Wilson. Thank you, thank you, Mr. Pocan. And now
    Mr. Good of Virginia.
        Mr. Good. Thank you, Chairman Wilson, and Ranking Murphy
    for holding this hearing. I am concerned by the recent
    announcement of the Biden administration that they're going to
    continue to freeze the student loan payments through January 31
    of 2022.
        Continuing the student loan payment freeze will saddle
    students with an albatross of debt even further down the road,
    rather than having them start, or continue to pay down their
    balances. While heavy handed government shutdowns have forced
    unemployment on many Americans, we all know there's no longer a
    labor shortage--or there is now a labor shortage with 10
    million job openings, so there's no justified reason to
    continue the student loan freeze.
        Mr. Cordray in your past role in the Consumer Financial
    Protection Bureau you talked a lot about predatory lending.
    Today the Federal Government itself projects that more than a
    quarter of all Stafford loans will default. I served 17 years
    in the lending industry, and I could tell you that no business
    could survive a 25 percent default rate, it's only the
    government that would operate with that kind of a default rate.
        And any business would have to quickly close its doors. It
    certainly wouldn't continue the practice of business as usual.
    However, the government still proceeds with granting loans to
    millions of borrowers with few restrictions. Knowingly making
    loans where one in four will default seems the very definition
    of predatory to me. Making loans to unqualified, and perhaps
    unsuspecting borrowers who have no demonstrated ability to
    repay, and the can so easily find themselves caught on the
    treadmill of automatic annual renewal.
        It appears that the Federal Government's policy is let's
    put our students in as much debt as we can, and just have the
    taxpayers fund the massively overpriced and ever-expanding
    budgets of these woke, leftist liberal institutions of so-
    called higher learning.
        The taxpayer is losing in this. The student is losing in
    this, and it's only that these progressive institutions with
    these massively increasing, exorbitant prices that are laughing
    all the way to the bank on the back of the taxpayers and the
    students.
        Mr. Cordray, given your documented flip-flopping both
    opposing, and now supporting, predatory lending practices, why
    do you think it's OK to cavalierly lend out taxpayer funds and
    saddle these students with so much additional debt?
        Mr. Cordray. Thank you for the question. And what I would
    say is this. The cost of higher education is high, people need
    assistance to be able to access that and better their lives,
    and improve their employment prospects for the future, and some
    do that, and do that successfully, and some do not.
        And it's a major public policy issue. It's an issue really
    more for Congress to decide, you know, what are the tenants of
    how we lend to students and their families, and what kind of
    requirements to be imposed. It's not for me to say, it's for
    you all to say, and my job is to run the program.
        By the way, I don't believe that I've changed position on
    this at all. I think that the issue of Federal student loans is
    important in terms of accessing the ability to improve people's
    lives, but the ability to repay those loans and on the back end
    of those there's a high number of defaults, and we need to keep
    working at how we can improve these programs.
        So in any event, I mean we can have a debate about the
    different economic philosophies here that maybe you and I have,
    and maybe they're not in full agreement, but beyond that I'm
    going to run this program as best I can. I'm going to do it to
    protect borrowers and students, and I'm going to do it to
    protect taxpayers as much as possible, and I'm happy to have
    your input as we do it, to make sure we do it as effectively as
    possible.
        Mr. Good. Well we're certainly not protecting taxpayers and
    thank you for your answer. We're certainly not protecting
    taxpayers. The American people are not getting a good
    investment on their dollar with a 25 percent default rate. And
    again, students are not coming out ahead if they don't have the
    ability to repay, and again we are facilitating the rapid
    inflation on college campuses for frankly non-academic
    expenses, and there's no end in sight to that.
        Mr. Cordray, you've leveled a lot of public criticism at
    your servicing partners, which seems to me to be quite frankly
    a bit of blame shifting, especially on public service loan
    forgiveness and other programs. You know while that can make
    for some crash to beat up on them, this habit makes for bad
    partnerships, and you're certainly running a Federal program
    that needs partners.
        And this year alone you've had four key servicers to my
    understanding, have walked out on you, or ceased the
    relationship there. Given your history of supporting what I
    would call again this predatory lending practice here, and the
    refusal of some service partners now to work with you, I don't
    know how the administration of the American people can expect
    you to put the students first here.
        What are you going to do to stop the hemorrhaging of these
    service partners?
        Mr. Cordray. So I appreciate the question, and in fact as I
    said, we have servicers--servicing partners if you will who
    have stepped up and are eager to take more of our portfolio,
    and we have ample capacity to serve the students and borrowers
    and we will.
        And those who are exiting, look we're putting more
    performance and accountability into these contracts, and that's
    not comfortable for everyone, or people just might over time
    they were in the program, they decided to go different
    directions. They're free to make those choices, and they have.
        But we have good servicers that we're working with here,
    that we're going to hold accountable. They're going to have to
    perform. They understand that. The borrowers and taxpayers
    should demand that they perform at a high level, and we're
    going to work with them to do that, but if they fail, they're
    going to be penalized, and that's the way this relationship
    should be, and that's the way it will be.
        Chairwoman Wilson. Your time has expired. Thank you so
    much.
        Mr. Good. Thank you Chair.
        Chairman Wilson. And now Mr. Espaillat from New York
    welcome.
        Mr. Espaillat. Thank you, Madam Chair. My question is
    regarding discharging students? loans, which is almost
    impossible under bankruptcy procedures. Students must bring a
    separate lawsuit within the bankruptcy matter to seek a
    discharge of their student loans, and the burden of proof in
    these cases is very, very high, with students required to show
    that continuing to pay the debt would impose an undue hardship.
        While there are statutory limitations that can and should
    be changed, the Department can also take steps to reduce the
    burden on borrowers who are already struggling financially to
    make it easier for them to secure relief under bankruptcy
    proceedings.
        My question is the Federal student--the FSA considering
    changing how it approaches bankruptcy procedures by changing
    how it determines which bankruptcies to contest, or by better
    defining undue hardship standards to reflect the realities
    faced by student loan borrowers?
        Mr. Cordray. Excellent question. I appreciate it very much.
    The way you described the bankruptcy process, and how it
    applies to Federal student loans is very much the way I
    understand that process. And I think that it doesn't work well,
    and we think that it needs to be reformed and re-evaluated, and
    we are committed to doing that.
        I will tell you that there have been discussions already
    with the Justice Department. They too are willing to have us
    review and revise our approach here. We think that would be
    better fitted to the realities of life for many people who
    struggle in bankruptcy, and are forced to go into Court, if you
    can imagine such a thing, and recount how miserable their lives
    are in order to beg for some kind of bankruptcy relief and
    rarely get it.
        We don't think that's the right place, that this is the
    right outcome. We are going to review that aggressively, and we
    will have more to say. We're in the process on that, and we'll
    have more to say about that hopefully fairly soon. It is a
    somewhat complex issue as bankruptcy always is, and there's
    different competing considerations here, but we think that
    there's more that we can do to reform that process, and we are
    committed to doing it just as you say, for the reasons that you
    say.
        Mr. Espaillat. My next question is we all know that to help
    borrowers the Biden administration extended the pause in
    repayments, interest accrual, and collections through January
    2022, for ED-held loans. The administration also extended these
    protections to all defaulted loans in the Federal Family
    Education Loan program. However, there are still millions of
    borrowers who have not received similar protections, including
    those with private loans.
        In what ways, if any, has the Direct Loan Program proven
    effective in providing protection for these borrowers?
        Mr. Cordray. So are we talking about what the Secretary
    just announced recently about public service loan forgiveness?
        Mr. Espaillat. That's correct.
        Mr. Cordray. OK. It was an important announcement, really a
    dramatic announcement that reflected a lot of hard work that
    people did to try to figure out what the flaws had been in the
    public service loan forgiveness program. Sometimes flaws that
    were made worse because services in the past may have given
    people wrong information, or people had been confused about
    whether they had the right to do this or that, and it
    frustrated a lot of people, and it caused a lot of people to be
    denied or discouraged from pursuing relief.
        The measures that the Secretary announced earlier this
    month are game changing for a lot of those people. And it's
    going to make a huge difference. There's an awful lot of work
    to do to make that announcement into reality. We are going to
    work to do that, and I believe it will bring relief to hundreds
    of thousands of people who deserve this.
        Again, who are we talking about? We're talking about people
    who served this country in uniform, we're talking about police
    officers and firefighters, people very much affected by the
    pandemic who need to get what they deserve under the law, and
    under the program, and we're going to make sure that happens,
    but it's an awful lot of work that are team is going to have to
    do at FSA.
        I'm confident that they will do it. They are high
    performers they haven't complained about the new burdens that
    this puts on them because we all understand it's an opportunity
    to bring important relief and progress to the American people.
    And what the Secretary said is what we're going to do, and we
    think that it's a very, very good direction to go, and we're
    going to do the hard work of making it happen.
        Mr. Espaillat. Thank you, Madam Chair, I yield back.
        Chairwoman Wilson. Thank you so much. And now we'll hear
    from Mrs. Miller-Meeks of Iowa. Welcome. I see you walking.
    Mrs. Miller-Meeks. Some technical difficulty with Mrs. Miller-
    Meeks, she has frozen. She is frozen. We'll go on to Mrs.
    Harshbarger.
        Mrs. Harshbarger. Thank you, Madam Chair. Mr. Cordray, I do
    have a question for you. On March 30 the FSA announced a
    program to somehow undefault some borrowers who defaulted
    during the pandemic. Now that's pretty clear that probably
    isn't the law but setting that aside.
        You know I'm also concerned that it's 7 months later and
    that still hasn't happened which clearly shows there wasn't
    even a plan in place in order to achieve that initially. So did
    somebody just hit the send on the press release before they had
    a plan in place, I guess is my question?
        And I suppose I'm concerned that not only has the
    Department demonstrated its willingness to ignore the law, but
    it also doesn't even appear to have a plan on how it's going to
    ignore the law. So does FSA now just write press releases and
    then hopes and prays it's all going to work out in the end is
    my question, and that begs to say that borrowers are just going
    to sit in limbo for months, so what's the process for this sir?
        Mr. Cordray. So if the question is does FSA write press
    releases without thinking about the actual mechanics of
    carrying out these programs, the answer is no. We don't do
    that. Having said that, I'd be happy to have you frame your
    question again as to what exactly you would like me to address
    here in terms of where you're dissatisfied with what is being
    done.
        Mrs. Harshbarger. Well do they have a program? Do they have
    the mechanics of a program where people who have defaulted on
    their loans can somehow undefault on those loans I guess is my
    question.
        Mr. Cordray. OK. So I'm not quite sure. It could be a
    variety of things you're referring to. There were people who
    had FFEL loans at the beginning of the payment clause, they
    were at that time not covered by the payment clause, and later
    the payment clause was extended to them. And therefore we had
    to go to the guarantee agencies, and the lenders, and many of
    them who had defaulted in the meantime needed to be put back in
    the position they would have been had the pause applied to
    them.
        If interest had been collected and it was supposed to now
    be zero percent, that needed to be changed, and there's been a
    lot of work to do to make that happen. So I'm not sure beyond
    that what you're getting at, but I'd be happy to hear more and
    try to be more responsive.
        Mrs. Harshbarger. Well I'll try to rephrase the question
    and I'll submit that to you sir, and what I would like to do
    with the balance of my time is just yield back to the Ranking
    Member, Dr. Foxx.
        Mr. Cordray. OK.
        Ms. Foxx. Thank you, Congresswoman Harshbarger. I'm going
    to talk a little bit about borrower defense. Mr. Cordray
    exactly how many borrower defense applications are still
    pending adjudications? If you don't know the exact number,
    we'll expect to get an answer tomorrow.
        Mr. Cordray. That's fine. We'll be happy to give you exact
    numbers. What I know is coming into when I came into this
    position, there was a very, very high number of borrower
    defense claims that had not been adjudicated, and they had held
    up frankly over the past 2 years.
        Ms. Foxx. OK. Well you can give us that information in the
    response that you give us.
        Mr. Cordray. Yes, but I'd be happy do you want me to give
    you a little more answer here, or do you want me to just go on
    to something else?
        Ms. Foxx. Well let me tell you what questions I'd like to
    have answered.
        Mr. Cordray. OK.
        Ms. Foxx. How many claims have been adjudicated since the
    beginning of the Biden administration? How many claims have
    been filed since the beginning of the Biden administration?
    Have you set a timeline or goals for how quickly you'll clear
    the backlog? That's one you might be able to answer.
        Mr. Cordray. That's fine. And by the way we'll be happy to
    give you detailed responses that give you more exact numbers,
    but I will say there have been hundreds of thousands of claims
    piled up, and we are working down the backlog, however every
    time we make a new announcement about some kind of school
    that's closed, or some kind of loan forgiveness, it tends to
    make more people apply, and so this goes up and down with a
    variety of circumstances, but happy to give you exact numbers
    in response to exact questions from you.
        And then we won't be jousting about fuzzy particulars here.
        Ms. Foxx. OK. Well, we'd like to know why it's taking so
    long for you all to get through it. You just indicated that's
    part of the problem. I haven't heard much about schools closing
    recently, so that's news to me.
        Mr. Cordray. Well we had several close just recently, CD
    schools and Vista Schools, that really failed you, me and the
    borrowers and taxpayers all over the country, didn't do what
    they were supposed to do, and they've now closed and left
    everybody high and dry. That's bad performance, but that does
    happen.
        Ms. Foxx. OK. Well, we know from Secretary Cardona's
    statement when he spoke to us that people have waited a long
    time, and they want to work swiftly, but shouldn't your
    announcement from August 24, stating you'd grant 100 percent
    relief make this process go more quickly?
        And why did you stop updating the data center with
    information on borrower defense claims? Something the previous
    administration did monthly.
        Mr. Cordray. So we haven't stopped the data center,
    although I will say these hearings have a salutary action
    forcing effect. And we updated the data center yesterday for
    the most recent quarter. We expect and plan, I think my
    understanding is that the data center is to be updated
    quarterly, and it will be updated quarterly on my watch.
        I can tell you that. When I came in, we were about 6 months
    behind, and we're catching up now, and we will keep you posted
    on that.
        Mrs. Foxx. Thank you.
        Mr. Cordray. In terms of borrower defense claims, you know
    sometimes it's difficult, sometimes they're one by one type
    claims, and those are hard to administer in an effective way,
    but that's something we're thinking through. As you say 100
    percent relief will simplify the process somewhat, it's still
    not a simple process, it's complex in various ways, but we're
    continuing to work on it, and we'll be glad to give you
    progress reports on how that's going.
        Ms. Foxx. Frankly, I'm glad to hear you say that they're
    very complicated, because that's what the previous
    administration said, and it was condemned when it said that.
    Thank you very much Madam Chair, I apologize for going over.
        Chairwoman Wilson. Thank you so much. And I don't know
    whether Mr. Cordray has another homework assignment, or if he
    cleared that up in the amount of time that you had.
        Mr. Cordray. I think I do have another homework assignment.
    I did want to say to Representative Foxx I missed my chance
    earlier, congratulations. I saw that your old school had a big
    win on the football field last week, so I'm sure that your
    South Carolina colleagues are feeling your overlordship of them
    for the time being, so.
        Chairwoman Wilson. Thank you. Thank you so much.
    Representative Sherill New Jersey. Still with us? How are you?
        Ms. Sherill. Thank you.
        Chairwoman Wilson. Welcome.
        Ms. Sherill. Thank you, Madam Chairwoman. Mr. Cordray this
    Committee has examined the harm that unscrupulous for-profit
    colleges have inflicted on students, many of whom are students
    of color, first generation students, and student veterans.
    About 2 weeks ago I met with the American Legion
    representatives in my District, including the County Commander
    of Morris County.
        They specifically brought up how concerned they were about
    predatory lending. They're concerned about how for-profit
    schools are targeting veterans because of their GI benefits.
    And we know that one way the VA has attempted to combat bad
    actors from taking advantage of our veterans is through the GI
    Bill comparison tool, which tracks complaints, and FTC
    settlements against bad actor for-profit institutions.
        But this is only one tool designed to help one targeted
    group. Can you please explain how the Federal Government and
    states can better work together to effectively monitor and
    oversee these institutions?
        Mr. Cordray. Thank you. It's a great question, and by the
    way the example you gave which I know is near to your heart of
    service Members in particular, is a very important
    constituency, and if there one that we were going to pick out
    as a priority that certainly would have one of the best cases
    to make.
        And I'm glad to see that some of that has gotten itself in
    place. And we are doing data matches with DOD now. That's
    something that we can do. And we're getting much more relief to
    more people, and we want to get relief to everyone frankly who
    deserves it.
        In general, though to your question, we can work together
    with State officials. We want to work together with State
    officials. Under prior policy, the prior administration, they
    blocked the Department and the FSA from working with State
    officials, and frankly it led to--what did it lead to? State
    officials suing the Federal Government just to get information
    they thought they needed to oversee these programs.
        That's not the way we should be working together, and we
    have stopped that. Going forward where we have complaints--by
    the way, states will hear from people, we will hear from
    people. The FTC will hear from people, we need to bring all
    this together, CFPB as well, and talk together and think
    together about how to solve these problems. That's what we will
    do, and I think we'll be more effective as a result.
        And in terms of how we will address these issues it will be
    a variety of different means, sometimes it will be data
    matching, sometimes it will be going after high-risk operators
    that we think are letting people down. Sometimes it will be
    other things, but we will work closely with our State partners
    on this rather than pushing them away and I think that's the
    right answer.
        Ms. Sherrill. Thank you. And we went over some of what
    you're going to do with the State actors. Are there other
    actions that FSA is taking, or planning to take to improve the
    oversight of the for-profit sector?
        Mr. Cordray. Yes. And again you know some people would say
    we're targeting the for-profit sector. We're not. We are
    targeting any schools that are not performing as they should,
    that are violating the law, that are abusing and mistreating
    students and borrowers and their families. Whoever those are,
    that's who we're going to go after, and we will, and we need
    to.
        And people need to see that we're doing that so that the
    other schools get the message and shape up. That's the way law
    enforcement works. It has a deterrent effect, and that
    deterrent effect is important because it brings more people
    into line. We're going to be working with the Federal Trade
    Commission. They've signed up to work with us, and they will be
    a very effective partner.
        They have 100 years of history. They know what they're
    doing. They're eager to take on schools that are violating the
    law. We will work with them in a strategic way. We will work
    with states where that's appropriate. We will work with the
    CFPB where that's appropriate, and the Justice Department.
        So that's how we plan to proceed here. I don't know if I
    quite answered your question. If I didn't feel free to renew
    it.
        Ms. Sherrill. No I appreciate that, and I think that is a
    good flag. We're thinking of my specific concerns were those
    bad actors that have been really taking advantage of some of
    our students. You know finally, I just wanted to ask the
    American Rescue Plan included a historic provision to close the
    90/10 loophole.
        Mr. Cordray. Yes. I was actually going to go there in
    response to your last question but forgot.
        Ms. Sherrill. And I'll go there.
        Mr. Cordray. And that's where you went. Sorry, yes.
        Ms. Sherrill. I'll go there, I'll go there. And so as a
    result of the closure of the loophole for-profit institutions
    will be required to derive not less than 10 percent of revenue
    from funds other than Federal education systems funds, and now
    including the GI Bill, which I think is important.
        So this will protect the integrity of the 120 billion
    dollars spent on Federal financial aid every year, and guard
    against a waste of taxpayer dollars. The 90/10 rule also helps
    ensure that Federal resources are not funneled to institutions
    that are fully reliant on taxpayer funded programs for
    financial viability.
        So now that the Department's beginning the negotiations to
    close the loophole, the 90/10 rule will protect veterans and
    service Members, who until recently, as I mentioned we were
    just discussing, have been targets of predatory recruiting
    practices by low quality providers.
        So since the closure of the loophole will start applying to
    institutions, to fiscal years beginning on or after January 1,
    2023, what steps can FSA take in the interim to better enforce
    that rule?
        So for example, are you considering additional consequences
    for institutions that fail the 90/10 rule in the first year as
    part of a provisional program participation agreement?
        Mr. Cordray. Yes. We will do whatever we can to help bridge
    the gap between now and when that law takes effect. I will just
    say I wrote a book about my time at CFPB, the 90/10 loophole
    was one of the frustrations that we experienced, and I talked
    about it in my book.
        And in the end, you all have now fixed that. Thank
    goodness. Good work by the Congress there. In the meantime, if
    there's things we can do--and I don't know what they all may be
    to try to enforce that, even though it's not yet law, we'll try
    to protect taxpayers on that, but it was a terrible loophole
    that people were driving the truck through and it was hurting
    us, and I appreciate the Congress stepping up and fixing that,
    that was good work.
        Ms. Sherrill. Well, thank you. I'm not sure Congress gets
    too many atta boy's, so thank you so much, and with that I will
    yield back Madam Chairwoman.
        Chairwoman Wilson. Thank you so much. Mrs. Miller-Meeks
    you're now ready? Good welcome.
        Mrs. Miller-Meeks. Yes ma'am, I'm ready. Thank you all.
    I'll try not to go over my time. So Mr. Cordray as of April
    2020, nearly 1.3 million borrowers had their employment
    certified by the Department and were on track to receive public
    service loan forgiveness.
        My democrat colleagues would like to say that this program
    is a way to reward first responders, and frontline workers for
    their dedication to public service, but according to FSA data,
    the average balance forgiven as of April 2020, was
    approximately $83,000.00.
        And let me say that I am a 24-year military veteran, so I
    have no issues and have used the GI Bill, and I have also
    instructed people about joining the military when they are in
    the healthcare fields, utilizing loan forgiveness. But these
    statistics suggest that graduate degree holders are the vast
    majority of beneficiaries under this program.
        Now we certainly want American workers to be educated and
    to be competitive in the workforce, but this highlights a real
    concern where the statute is drafted so broadly that public
    service employees currently account for 25 percent of the U.S.
    workforce. Do you have any indication as to what share of the
    PSLF population work in an authentic actual public service like
    teaching, or being a first responder, or doctors at a tribal
    healthcare setting, or a free medical clinic rather than their
    own clinic, or a not-for profit that still is highly
    successful?
        Mr. Cordray. Yes. And if I may let me say several things.
    First of all, I appreciate the point you made early on, which
    is as you say you made use of the GI Bill. You know the
    transformational effect that can have on your life in your own
    life, and the same is true for many of your colleagues around
    the country. So we want to make sure that people who are
    entitled to public service loan forgiveness actually get that,
    and we follow through on that promise that was made to them in
    the law.
        At the same time as you note, we don't want anybody to be
    taking advantage of that program who doesn't really deserve
    public service loan forgiveness, and so one of the things we do
    at FSA is we have to determine employer eligibility and any
    kind of doubtful close call, and we will make those calls, and
    we will make them you know, faithfully to the intent of the
    law.
        Anybody who's working for the government is entitled to
    public service loan relief, and if you----
        Mrs. Miller-Meeks. OK sir, thank you for that. I'd ask what
    share of the population. Let me go to my next question. Do you
    believe that a researcher at the Brookings Institution is doing
    public service?
        Mr. Cordray. It may depend on exactly what the nature of
    the job is. I would say generally, I would think no, but----
        Mrs. Miller-Meeks. What about a researcher at the Heritage
    Foundation?
        Mr. Cordray. Again, generally I would say no, but maybe
    they could make a particular case. I'd have to see the case to
    be persuaded by it, but in general----
        Mrs. Miller-Meeks. Do you believe that Turning Point USA, a
    501 C-3 performs a public service?
        Mr. Cordray. Look, I'm not familiar with that organization,
    so I can't really speak to it.
        Mrs. Miller-Meeks. What about Planned Parenthood. It's a
    501 C-3. Do you believe that taxpayers should be shouldering
    the cost to forgive the loans of a Planned Parenthood employee?
        Mr. Cordray. Again, and you know as to all the groups you
    stated, not specifically to any one of them, there are certain
    jobs that depending on what people actually do, it may be that
    the bulk of their time is devoted to actual public service, but
    if it's not, then they should not get the relief, and that's
    generally how we would approach these issues.
        Mrs. Miller-Meeks. So having left home at 16 as the fourth
    of eight children, I served as a nurse and a physician in the
    United States Army. The former director of the Iowa Department
    of Public Health, a State Senator, and now a U.S.
    Congresswoman. I am not against public service, obviously, and
    I am not against the PSLF, but I am concerned that the
    eligibility for the program is so vast and so broad, that we
    are using a program intended to incentivize public service on
    industries and jobs that ultimately do not fit that definition.
        Can your office commit to providing this Committee a
    breakdown of the PSLF borrowers by occupation, and by
    undergraduate and graduate degree?
        Mr. Cordray. We would be glad to if you followup with a
    specific data request and I guess you just made one, and we'll
    try to take it down, but if you want to convey it in writing so
    we have the exact particulars, we'll make sure we get the
    answer right. We'll provide you with whatever information we
    have.
        And by the way it's a fair point you raised. Public service
    loan forgiveness should go to people doing public service. It
    should not go to people pretending to do public service who are
    really doing something else. And we'll be glad to ferret out
    anybody who is trying to take advantage of the program.
        At the same time these are very situational instances that
    we have to deal with case by case sometimes, although as I say,
    everything you've described in your background, every bit of
    that would qualify for public service loan forgiveness, and I
    hope that you fared reasonably well through the GI Bill and
    others because you deserve it.
        Mrs. Miller-Meeks. Well thank you for that, and I certainly
    have, as I said, made a request. I hope that you'll fulfill the
    request. And I hope that the information will get to us as soon
    as possible, hopefully no later than Thanksgiving. Thank you so
    much. I yield back my time, Madam Chair.
        Chairwoman Wilson. Thank you, so much Ms. Miller-Meeks, and
    we look forward to the response because all of us are
    interested in your question. In fact, I have a bill that I'm
    crafting on public service to look at that also, so thank you.
    Now Representative Castro has joined us, welcome.
        Mr. Castro. Thank you, Chairwoman. And thank you Mr.
    Cordray for coming before this Committee to discuss these
    issues relating to Federal student aid. Under the public
    service loan forgiveness, borrowers who have made 10 years of
    payments while working for certain public service jobs, would
    have their Federal student loan balances forgiven in full as
    you know. But in 2019, the U.S. Government Accountability
    Office, the GAO, reported that the Department of Education had
    denied 99 percent of public service loan forgiveness
    applications.
        And many public servants were rejected because they
    received misinformation from their servicer, or were enrolled
    in the wrong payment plan, among other issues. The Department
    of Education recently shared new data about Federal student aid
    programs, including a new report on the PSLF program
    demonstrating that most borrowers are not yet eligible for
    forgiveness because they have not been in repayment for 10
    years.
        However, for many of those borrowers, this is due to the
    fact that they had the wrong type of loan, and as a result, had
    to consolidate into the direct loan program which caused their
    repayment clock to reset and increase their time to reach
    forgiveness.
        The Federal student aid has recently announced a limited
    waiver to help borrowers access forgiveness through the PSLF
    program. So I wanted to ask you, moving forward, how will the
    FSA ensure that loan servicers are equipped to help borrowers
    access PSLF, both during the time limited waiver, and into the
    future, especially given the upcoming return to payment?
        Mr. Cordray. Thank you. It's a good question, and I don't
    mean to refer to my book again, but again at CFPB the book I
    wrote, Watchdog is about some of the failures that I saw that I
    wished we could have corrected that we didn't, the 90/10 rule
    was one, the PSLF program was another as you described. Very,
    very few people over the years have gotten any relief under
    that program.
        I think it was just a few thousand at the beginning of this
    year. The changes that are being made here that the Secretary
    announced, and due to a lot of hard work by people at the
    Department and at FSA are going to result in the numbers of
    people receiving public service loan forgiveness before the end
    of this year will be into the tens of thousands and a multiple
    of four or five over what was done before.
        And we're on the road to hundreds of thousands of others
    getting their monthly count of how many qualifying months
    boosted forward and the relief being made easier for them.
    Those are all things that we're going to do.
        Now, having said that, that was an announcement. There's a
    lot of hard work that follows on an announcement that has to be
    done to make it effective. You know that. You know government
    very well. It's our job to do that. We have to work with our
    servicer. In this case it's PHEAA, they're our loan
    forgiveness--public service loan forgiveness servicer, and that
    will be transitioning at some point, but they work on this
    program.
        They do hard work every day to try to deliver this relief.
    We're going to be overseeing that to make sure that's
    happening, and we're going to be working closely together. I
    want to see this succeed. The Secretary wants to see it
    succeed. I think all of us want to see this succeed.
        That people who deserve forgiveness based on many years of
    public service are getting their payment accounts proper,
    they're getting their relief after 10 years, and this program
    will finally deliver what it was supposed to deliver. That's
    our job here, and we're going to do it.
        Mr. Castro. And can I ask you what were the consequences if
    any, to the servicers or others involved in administering this
    program, and the fact that 99 percent of applicants were
    rejected, and the program was not working as it was intended?
        Mr. Cordray. So I can't speak to what may have happened
    before I came here. But what I will say is there are some who
    are rejected outright, there are many who are not rejected, but
    they're told that they're on their path to it. They may not be
    nearly as far along that path as they thought they were, and
    there's been a lot of frustration about that, too.
        The changes the Secretary announced which are significant,
    put people much farther forward toward 10 years, pushed at
    least 20,000 and actually close to 50,000 with a few further
    changes past 10 years, and deserving now and entitled to full
    relief and they'll get it.
        And there are hundreds of thousands who have had their
    payment account advanced many, many months in some cases, and
    if they consolidate their loans, which is the step they need to
    take if they're FFEL borrowers, they may actually go all the
    way from nothing to full forgiveness. So we're encouraging
    everyone to do that, we would like you to help us encourage
    everyone to do that.
        Mr. Castro. Let me just make one more point.
        Mr. Cordray. Sorry.
        Mr. Caster. Well I just want to be sure that there wasn't
    some malfeasance there, that somebody wasn't trying to make
    money off of a scheme.
        Mr. Cordray. Yes, actually I'll say two more things if I
    may. No. 1, we are concerned about that, and that's why one of
    the pieces that the Secretary announced is a redetermination
    program for people who might have applied before and been
    rejected, that they can reapply, and that they should seek
    reconsideration.
        So we want to correct those errors where possible. The
    other is there are scams and frauds that develop around these
    programs. It's true of everything in government. If there's
    something we're doing that's good for people, there are
    scammers and fraudsters who will try to get into it, use it as
    a way to get people's personal information and so forth.
        We try to fight that as much as we can, but in terms of the
    actual program we will give people a chance to have reconsider
    here.
        Mr. Castro. I have to yield back, the Chairwoman is cutting
    me off here, I yield back Chairwoman.
        Chairwoman Wilson. This is a very, very interesting
    meeting, so you could see why we keep going over time because
    so many questions, and so many concerns. I told you before the
    meeting started how impactful this was going to be, but we
    appreciate your cooperation.
        Mr. Cordray. You warned me very clearly, yes.
        Chairwoman Wilson. I don't know if Mr. Castro wants
    anything in writing. You're fine with your responses?
        Mr. Castro. Yes. If there's anything else in writing,
    anything else left to answer on those questions if you could
    put it in writing. Thank you, Chairwoman.
        Chairwoman Wilson. Thank you. And next Representative Comer
    Kentucky.
        Mr. Comer. Thank you, Madam Chair. Mr. Cordray I'm sure
    you're very aware that Ranking Member Foxx and I, along with
    several of our colleagues on the House Oversight Committee sent
    a letter to Secretary Cardona in July requesting the release of
    a report commissioned by former Secretary Devos detailing
    budget projections and information related to the value of the
    Federal Government's entire student loan portfolio.
        This letter followed several requests. So we invoked the
    statutory seven-Member rule requiring executive branch entities
    to produce documents when seven Members from the Oversight
    Committee make the request. Now this seven-Member rule has just
    started this year. This was the result of a lawsuit by Elijah
    Cummings and the minority at that time, the minority democrats
    of the Oversight Committee, because they were having difficulty
    getting information from the Trump administration.
        So now there's a process for the minority to get
    documentation from the executive branch if they refuse to
    comply with our request, and it's called the seven-Member rule.
    We invoked the seven-Member rule. We've only done that a couple
    of times this Congress.
        Yet the Department of Education refused to respond with
    appropriate documents. So we went and we sent another followup
    letter 2 weeks ago. Again, I have received no response from the
    Department. Now Mr. Cordray this information would be very
    useful in determining the scope of the student loan debt we're
    discussing in this hearing today, and the debt American
    students are living with every day.
        I encourage you to work with your colleagues to provide
    this information to the Oversight Committee as soon as
    possible, and I might remind you that Ranking Member Foxx is
    also a very active Member on the House Oversight Committee. So
    is that a reasonable request?
        Mr. Cordray. So, and again Ranking Member Foxx asked me
    about that same report I believe earlier in the hearing, and
    I'll simply give you the same answer I gave her, which is what
    I know on the subject, which is--and by the way, if you haven't
    received a response on that, I believe one is forthcoming. You
    should get it immediately, and again these hearings do have a
    way of kind of pushing forward the work for us, it's just the
    nature of life, I guess.
        But let me just say what I understand is that the report
    had been provided in a redacted form. The redactions were
    imposed by the previous administration. It's been looked at,
    and it's thought that was again the appropriate response, and I
    think it's again being provided in the same redacted form, and
    there's some concern about some of the metrics in that report
    that we think are not accurate, and we're offering--the
    Department is offering to provide a briefing to everybody who's
    interest in the subject of that report to go through it in some
    detail.
        And if that's helpful to you, it might be worth doing that,
    and then see if you're satisfied, and if you're not you could
    followup at that point. But I think that's what would be
    responsive to your request.
        Mr. Comer. When you ask any Member of Congress whether
    they're republican or democrat, there's a big difference
    between the republicans and democrats from an ideologic
    standpoint up here, and every American sees that. If you say
    name the 20-25 biggest issues that affect people in your
    District, student loan debt is going to be in just about every
    Member's list of 25 issues.
        And it shouldn't be this hard-to-get information to help us
    determine the extent of this student loan debt, and it's been a
    frustrating process. I hope that from this point on the
    Department of Education will comply with the House Oversight
    Committee's simple request for information. Let me switch
    gears.
        Mr. Cordray. Sure.
        Mr. Comer. Recently Department of Education gave the
    negotiated rulemaking process to make changes once again to the
    borrower defense regulations. In the highly irregular move, the
    Department announced that it planned to retroactively change
    the borrower defense rules for all Federal student loans, thus
    applying the new regulation to borrowers whose claims have
    already been adjudicated.
        Retroactively in law, is highly disfavored,--the Supreme
    Court precedent is quite clear that rules should not be
    retroactive, unless authorized exclusively by Congress. The
    Biden administration's proposal runs counter to this settled
    area of the law on retroactivity without an authorization
    evident in the Higher Education Act, permitting the Department
    to establish retroactive rules.
        Even the Obama administration's borrowers defense rule did
    not attempt to make such an extraordinary change. Mr. Cordray
    HEA does not authorize such actions. What authority does the
    Department have to make retroactive changes to the borrower
    defense regulations?
        Mr. Cordray. Boy, I got about 5 seconds, and that's about a
    10 minute answer I need to give you. So I don't know if you're
    going to need that one in writing, or just what. But what I'll
    say is I know the borrower defense program is very complicated.
    There have been three or four changes of direction by different
    either rulemakings or policy differences under the prior
    administrations.
        One of the things I know is that's one of the issues that's
    going to be taken up in negotiated rulemaking process, which
    will be a very public process the Department's undertaking. I'm
    not running that process, but we have input into it. Everybody
    will have input into it.
        We're happy to have your input into it, and get that rule
    into the right position, and we'll work to do that. In general
    though, in terms of the zig and zag in this that there has been
    in the past, you're absolutely right about that. We could give
    you chapter and verse on that, but it would probably be better
    to do that in writing if you will.
        Mr. Comer. I'll look forward to receiving that.
        Chairwoman Wilson. Thank you. Thank you so much.
    Representative Courtney, how are you? Connecticut.
        Mr. Courtney. I'm good. Thank you, Madam Chair, and thank
    you Mr. Cordray for being here today. I agree with your earlier
    testimony that Secretary Cardona's decision on October 6 to
    untangle the public service loan program is very significant
    and powerful decision that will help hundreds of thousands of
    student loan borrowers.
        I think probably every Member who got frustrated with
    constituents calling them over the last 3 years, about the fact
    that the Department of Education and the loan servicers were
    just you know really arbitrarily denying their 10 years of hard
    work in terms of complying with the program. I was here back in
    2007 when the College Cost Reduction Act was passed that
    created the public service loan forgiveness program.
        I think it's important to remember it had strong bipartisan
    support and was signed into law by George W. Bush. So you know
    again, I think if there's a consensus area in terms of student
    loan relief, certainly people who you know either wear the
    uniform of this country, or step up as cops, or teachers,
    nurses, etc. in public service jobs who are earning their
    discharge, is something we should all pull together and work
    hard to implement.
        Particularly, I want to again note that you know we're
    already hearing from constituents that have gotten the good
    news in terms of emails from the Department, so it's happening
    in real time, you know, where people are getting the good news
    that payments are being recognized and moving up their
    discharge date.
        The fact that again, people who are in the military are
    also going to have their time overseas counted under you know
    the deferred payments that occurred when they were overseas are
    going to be counted as qualifying payments.
        Again, I just want to confirm that's something that's going
    to be implemented by the Department of Education in conjunction
    with DOD, so it's really going to be done internally in terms
    of an administrative function is that correct?
        Mr. Cordray. Yes. We have worked hard to get automated data
    matching with DOD, and by the way we're trying to get it across
    the Federal Government through Office of Personnel Management,
    we think we will. It takes a little bit of time to do some of
    these things, but yes, we're going to make it as easy as
    possible.
        And we also would like to work with states, and local
    governments as well, and maybe you and your staff could help us
    with that on some outreach on that and so forth. We want
    everybody who is entitled to the benefits of this under the law
    to get the benefits of this.
        And by the way every day I work with people here at FSA and
    the Department. They're all public servants too as you know.
    I'm really proud of the work they're doing. Some days you're
    especially proud because really good work has gotten done, and
    the day of that announcement about public service loan
    forgiveness was a day I was especially proud of the people at
    FSA.
        Mr. Courtney. Sure. So you know and again just on that
    point. You know this Committee reported out as part of the
    Build Back Better Act, a provision to clean up the problem with
    the military service Members. Again, the Secretary's order kind
    of obviated the need to include that into the BBB when we do
    final passage.
        I want to again thank your staff who helped work with
    Committee staff, in terms of fashioning the language, and again
    clearly the commitment was there within your agency. The other
    part of the Secretary's order, just I have a question, I just
    really want to get through this is that you know some people as
    Congressman Castro eluded, are going to actually have to file a
    waiver request to get the consolidation relief, which the
    Secretary's order included.
        And you know we're already hearing from constituents that
    servicers who are getting calls, because I mean this is
    something that people are watching like a hawk, you know back
    home. Are already being told they don't have the guidance to
    implement the PSLF changes.
        And again, we want to make sure because there's a deadline
    here of October of next year for people to file these requests,
    what steps FSA is going to take. We want to be partners with
    you to get the word out to people in terms of making sure that
    you know, they don't get caught in another sort of bureaucratic
    gymnastics that would affect their eligibility for discharge.
        Mr. Cordray. Yes. It's a very fair question, and by the way
    we're operating in real time here. It's been a matter of days
    since the Secretary's announcement, and we want to make sure
    that people have the right guidance here, and you know
    sometimes quick is the enemy of the good, but we're working on
    that.
        And we will work with the servicer, which is PHEAA, to make
    sure that they have the guidance to provide it to people. We've
    heard some of the same things you've heard, and we want to get
    these things sorted out as quickly as possible, but we do
    intend, and we will deliver, on the announcement that was made,
    and get relief to people, and we will communicate closely with
    them going forward.
        And by the way to the extent you hear things, pass them on
    to us because we're probably hearing the same things, but if we
    aren't, we want to hear from you, too. OK?
        Mr. Courtney. So when you have a form developed for the
    waiver application, I mean please share that with Member
    offices because that's obviously that's the tangible document
    that is going to trigger relief for folks, and again we
    definitely want to work with you.
        One last point, Mr. Pocan talked about the refinance issue.
    Again I've introduced a bill to actually track the Federal
    reserve benchmark, and allow people to refinance down, so there
    already is something actively in the hopper. You know with this
    Congress, the 117th Congress to go that route and look forward
    to hopefully working with the Secretary and your office to you
    know provide something that is screamingly obvious, which is
    that people should be able to refinance their debt with student
    loans just like you do with a home mortgage or other forms of
    consumer debt.
        Mr. Cordray. I understand your point on that, and whatever
    you do we will be glad to implement.
        Mr. Courtney. Thank you, sir. I yield back.
        Chairwoman Wilson. Thank you so much. Representative
    Letlow?
        Ms. Letlow. Thank you, and Mr. Cordray thank you for taking
    the time to testify before the Committee today. As you know the
    pandemic brought on many challenges, especially for students
    and borrowers. So Congress provided a temporary pause on
    Federal student loan repayments.
        The CARES Act provided the Secretary of Education authority
    to suspend all interest accumulation and monthly payments on
    federally held loans through September 30, 2020. Additional
    executive action extended the repayment pause by the previous
    and current administrations.
        However, most recently the Biden administration has
    extended repayment one final time until January 31, 2022.
    Unfortunately, to date neither the Department, nor FSA has made
    public a comprehensive plan for returning borrowers into
    repayment status.
        The repayment date is just around the corner, and this lack
    of clarity is unhelpful to the 45 million borrowers. These
    individuals need to have an explicit understanding on all
    requirements and expectations when the payment suspensions end.
    In fact, law requires borrowers to receive no less than six
    notices when normal payment obligations are about to resume.
        Additionally, this uncertainty has made it difficult for
    loan collection agencies to have adequate time to plan and hire
    employees. As many businesses, these agencies had to let people
    go during the pandemic. Now loan collection agencies will be
    expected to resume their business as usual and meet the same
    collection requirements for the Department as soon as repayment
    begins again.
        These agencies need time to ensure they have employees
    hired and trained so they can deliver on the Department's and
    borrower's expectations. Mr. Cordray loan rehabilitation has
    been a key tool to assist borrowers. In fact, Congress
    recognized the value of this tool, and it was included as a
    provision in the CARES Act.
        Why did FSA decide that private collection agencies should
    not proactively explain the benefits of loan rehab to
    borrowers?
        Mr. Cordray. So I think you have accurately and admirably
    described the challenges here of the multiple extensions of the
    repayment pause, and now the moving to a final deadline. And
    what I'll say in terms of a communications plan, we have
    extensive communication plans that we're already activating and
    operating under.
        We have been for the last couple of months now that we know
    this is the final deadline. We will be reaching out to tens of
    millions of borrowers here, and they will get the required, as
    you noted correctly, at least six communications from us on
    this subject, and that's what Congress said we should do, and
    it will be more than six in many cases.
        Some of those communications are coming directly from us,
    some of them will be coming from their servicers. We will have
    input into what those communications are, just to make sure the
    message isn't getting mixed here. We're also working, and we'll
    be awfully glad to work with you and your offices to make sure
    the message gets out that way as well.
        That's another way we can reach people. Some of them will
    listen to FSA. Some of them may listen to their servicer. Some
    of them will listen to neither of those, but they will listen
    to you. You know your voice is respected in your community, and
    other community groups, and others whether it's alumni
    associations, or student associations, or teacher's
    associations, or anybody can help us get this message out.
        We don't want anybody to mistake this, fall into
    delinquency default because they just didn't understand this
    was happening. They just didn't hear about it. Our job is to
    get this a blanket communication across the country, but all of
    you can help us do that and we would appreciate it.
        Now I can go into more detail and more plans.
        Ms. Letlow. I have one followup to that. I appreciate that.
        Mr. Cordray. Sure.
        Ms. Letlow. I'd like to followup. There are 11 private
    public collection agencies, PCAs on contract with the
    department, and it's my understanding that PCAs are at the
    ready to assist borrowers with rehabilitation when return to
    loan repayment begins. Will FSA allow PCAs to begin calls to
    defaulted borrowers on February 1, 2022?
        Mr. Cordray. So in terms of what's going to happen with
    defaulted borrowers, there are active consideration being given
    to that. There is various schools of thought as to what the
    pandemic pause has meant for defaulted borrowers. As you know
    the PCAs that you're talking about have not been able to engage
    in collection activity for the most part during the payment
    pause because there's been no debt to collect because it's all
    been paused right?
        So that's been a difficult situation for them we
    understand, and coming out of this, depending on decisions that
    are made about after January 31, you know, it's a difficult
    situation. We will communicate with people as we can, that is
    the PCAs, and we want to make sure we have plenty of capacity
    for reaching borrowers to make sure that they get this message,
    and that they don't misunderstand it, or fail to hear it.
        So I agree with you that's a prime consideration for us,
    and we're working hard to do that.
        Ms. Letlow. Thank you, Mr. Cordray. I yield back.
        Chairwoman Wilson. Thank you so much. And now Ms. Bonamici,
    thank you Ms. Bonamici for being here.
        Ms. Bonamici. Thank you so much Madam Chair and thank you
    Mr. Cordray. I agree with my colleagues who have noted the
    importance of this issue. A recent estimate from the Federal
    Reserve found that Americans owe more than 1.7 trillion in
    student loan debt, and in my home State of Oregon the average
    graduate has more than $27,000.00 in debt. So it's clear we
    need to work together to find the best policies to support
    student borrowers.
        So Mr. Cordray, we know of the three loan servicers that
    have announced that they do not plan to renew their contracts.
    We've talked about that. Navient Real EState Management, Fed
    Loan, these three companies serve about 16 million borrowers,
    so I want to ask about how the non-renewal of these contracts
    is going to affect borrowers and their families.
        So how will the developer let borrowers know if it's
    changing, and how can Congress help you make this transition as
    easy and cost effective as possible for borrowers, their
    families, and for taxpayers?
        Mr. Cordray. Yes. Thank you for the question and the
    numbers you have cited I believe are pretty much accurate. You
    know in fact are accurate. What I will say is there have been
    times in the past as I understand it, and it's history for me,
    I'm new to the job, that FSA hasn't always handled transfer of
    accounts well, and the servicers haven't transferred the
    accounts well, and there have been problems for borrowers.
        More recently and most of the most recent examples have
    been smaller universes of borrowers, but those have been
    handled better, and the communication plans are sounder, and
    the hand off is better, and by the way here the hand offs are
    being overseen very closely, and the servicers know that, by a
    coalition of overseers including FSA, CFPB, and 17 states.
        So that gives me more confidence. But at the same time you
    know we need to make this work. The way we do it is we start by
    transferring a small cohort of borrowers, and make sure that we
    work the kinks out in that, then we gradually move the larger
    cohorts of borrowers. That is well in process right now for the
    Granite State portfolio, the Navient portfolio is going to be
    handled we think more easily because it's a move directly from
    one servicer to another of the entire account all on the same
    platform, but we'll see.
        And we'll make sure that's done well. The PHEAA transfers
    are a little bit more complex because they're so big they have
    to go to multiple recipient servers. Not everybody on the same
    platform, so we will be bulldogging that to make sure that goes
    as well as we can.
        Ms. Bonamici. Thank you. And I want to get to another
    issue, but I know we'll be following up on that to see how it's
    going throughout the process.
        Mr. Cordray. Sure.
        Ms. Bonamici. So the Department of Education recently moved
    to provide targeted forms of loan relief, including people with
    permanent disabilities, those discharges to borrowers without
    requiring them to go through a process. And I've been a long-
    time supporter of helping borrowers with permanent disability,
    and perhaps I included some protections in my Simple Act, which
    will work to get more borrowers into driven repayment plans by
    automating the annual process of recertifying borrowers?
    income.
        Similar provisions to this Simple Act included in the
    Future Act, which as you know was signed into law last
    Congress, and even though income driven repayment is not a one
    size fits all solution, but it's a very effective tool.
        So how can automatic processes remove major barriers for
    borrowers, and get them the benefits they're entitled to under
    the law, and are there additional programs, including
    automatically updating income for borrowers on IDR plans that
    you would like to see automated in a similar way that would
    help streamline the process?
        Mr. Cordray. So excellent question, and I would say
    significant work in progress on all of the fronts you
    mentioned. No. 1, the total permanent disability announcement
    recently, that is vastly being automated, and the relief is
    being delivered to people, and it's significant numbers of
    people as you've said, several hundred thousand people.
        So that's an example of how we're starting to do this work
    better. The IRS relationship with FSA has really made progress
    over the last year or so, and there are ways that they can help
    us automate some of this, including as you say, income driven
    repayment.
        We want that to be as easy as possible for borrowers.
    Frankly, every borrower of student loans, who is now repaying
    student loans, we want them as much as possibly, in one of two
    plans. Either on an auto debit, if they're able to stay current
    and able to make those payments so they don't forget, they
    don't screw up, it's just regular, routine, you know the way
    you automatically debit an account for an expected amount, no
    surprises.
        That's what we want, and we're pushing people to make sure
    that they get into that as much as possible. If they're having
    trouble making their payments, or if they're going to struggle
    to make their payments, we want them to be on an income driven
    repayment. That's the right answer.
        It allows them to lower their monthly payment to an
    appropriate amount, and then going forward we can continue to
    adjust it to their circumstances year in, year out. That's a
    big deal for us. We're trying to make that simpler for people,
    and we want everybody out there, and help us spread the word
    among your constituents.
        If you're able to make your payment easily, get on auto
    debit. If you're having trouble making your payments, get on
    income driven repayment, and the process should be easier now
    than it was before, and don't take no for an answer on that.
        Ms. Bonamici. I appreciate that, and when we were working
    on the Simple Act, and this is over the last several years we
    found that there were many students who just did not meet that
    strict deadline on updating their income. And then they'd be in
    default, and then it was harder to get them out. So
    streamlining that process of automating I think has been a
    tremendous help. As I yield back Madam Chair, I do want to
    align myself to ask about the jobs that the loan forgiveness
    program, on that Mr. Cordray. Thank you, Madam Chair, I yield
    back.
        Chairwoman Wilson. Thank you. Mr. Keller welcome to our
    Committee.
        Mr. Keller. Thank you, Madam Chair. Mr. Cordray several FSA
    contractors have exited the Federal student loan servicing
    industry since the beginning of this year. As a result, over 16
    million borrowers will be placed with a new servicer at the
    same time they return to repayment status after nearly a 2-year
    pause. As you've noted, the return to repayment was challenging
    and was not only tasked without--excuse me, but it was also a
    challenging task even without losing any service.
        Among the servicers that have announced their exit was
    Pennsylvania Higher Education Assistance Agency, or PHEAA. This
    is an entity that does tremendous work in Pennsylvania, and has
    received some unfair criticism from congressional democrats,
    progressive advocates, and sometimes quite frankly your
    Department.
        You've repeated noted and eluded to it in your testimony
    that the reason some services made the decision not to renew or
    extend their contracts was that they were either unable, or
    unwilling to meet, or increased ability or performance metrics.
        For example, speaking at a conference in September attended
    by several FSA stakeholders, you noted that note everybody was
    thrilled with the new standards, but FSA stuck to its guns, and
    some of the servicers decided to exit the program rather than
    contend with these new realities.
        Does that statement, or does that include PHEAA?
        Mr. Cordray. So I'm not trying to----
        Mr. Keller. Does it include PHEAA or doesn't it, I've only
    got five minutes, yes or no?
        Mr. Cordray. PHEAA is exiting our program. They had reasons
    of their own for exiting. They have freedom of choice here.
    They've decided to exit.
        Mr. Keller. OK.
        Mr. Cordray. However, they are a big servicer. It's going
    to take time to move their portfolio. They're going to have to
    continue to work with us.
        Mr. Keller. OK. You've answered my question, I've got to
    keep moving. I can't have a filibuster I have to keep moving
    here.
        Mr. Cordray. OK. I was trying to answer your question.
        Mr. Keller. So you've talked to PHEAA about why they
    decided to exit? Again that's a yes or a no.
        Mr. Cordray. I have had conversations with PHEAA's
    leadership since I became head of FSA yes.
        Mr. Keller. OK. Now the contract extension for the
    remaining servicers, these new guidelines, were they made aware
    that--were the servicers made aware of these new guidelines on
    September 24 of this year?
        Mr. Cordray. Actually they were made aware of those
    guidelines sooner because we had to negotiate the contracts,
    and it took more than 2 months of hard work.
        Mr. Keller. OK. So when were they made aware of them. What
    date were they made aware of them?
        Mr. Cordray. It would have varied with different ones with
    them, but I think my very first conversation with loan servicer
    leaders, including PHEAA, I would have made a claim that this
    is what we intended, however can I say something?
        Mr. Keller. No. I'd just like to know what date that was.
        Mr. Cordray. Can I? Well I don't know what date that was,
    but it----
        Mr. Keller. Can you get us the date?
        Mr. Cordray. It was early. Let me say in context here, loan
    servicing is a hard job. I know it's a hard job. And I'll say
    this to you, and I'll say it to PHEAA, and I'll say it to all
    the loan servicers. I have seen mortgage loan servicing as head
    of CFPB. It's a very hard job. Having said that, we need to do
    a good job, and we have to have performance and accountability
    metrics in these contracts, and people have to meet them.
        Mr. Keller. I'm not going to disagree with that. I'm going
    to take my time back. I'm not going to disagree with that. We
    need to have transparency, and we need to make sure everybody
    understands what they're doing, and they have to provide a good
    job. And I know PHEAA does in Pennsylvania because they service
    all of Pennsylvania.
        But for people to make accusations that PHEAA is doing this
    because they don't want accountability is not fair. I'd like to
    know, and I'd like to know when you can provide me with the
    date you talked to PHEAA. When can I expect to have the
    information on when PHEAA was made aware of this?
        Mr. Cordray. Well look I don't know exactly what the
    situation here is on a request like this, but if you're asking
    for a specific question about a factual date.
        Mr. Keller. Yes.
        Mr. Cordray. We can provide it.
        Mr. Keller. OK.
        Mr. Cordray. If it would help.
        Mr. Keller. OK. I would expect--sir, it's my time. I would
    expect that by Friday of this week you can provide my staff, or
    the Committee with the date on which you made PHEAA aware of
    what the guidelines would be. I'd just like to know that. OK,
    because that goes to the timeline of when they decided or did
    not decide to continue the contract here.
        Again, it's all about accountability. And I've heard a lot
    of discussions today regarding student loans and educational
    institutions. In fact, the Secretary, Secretary Cardona said a
    couple months ago that everybody should be treated the same as
    far as educational institutions regardless of their tax debts.
    I'm still waiting for his plan on holding everybody to the same
    metrics. It's been going on forever.
        Mr. Cordray. Let me add something that may complicate your
    question. You asked when I told PHEAA something. When I first
    came in as head of FSA on May 4 and started speaking publicly
    about my job, I started talking about accountability and
    performance. And so that was in the air, whether I had said it
    directly to PHEAA say on the phone, or whether I said it
    generally and they heard it, everybody began hearing that after
    I became the head of FSA.
        That was not a message that was hidden or somehow sugar
    coated, that was part of what we expected.
        Mr. Keller. Well sir, here's a little bit of accountability
    that you and the Department can provide OK. I want to know the
    date when they were made aware, and I also want to see the
    Secretary's plan. When he agreed that everybody should be
    treated the same, here's accountability for you guys. OK? I
    want to see the plan. I want to see the plan to treat everybody
    the same from the Department of Education.
        Mr. Cordray. OK. Whatever you're expecting or requiring, or
    demanding, just put it in writing to us and we'll try to
    respond to you in writing. We would be happy to do that.
        Mr. Keller. You either do something or you don't. I will
    submit you my request in writing.
        Mr. Cordray. OK. But again, as to when PHEAA would have
    learned something, I had been talking about this from the first
    day on the job. They probably would have----
        Mr. Keller. No sir. That's--let's not dodge the question.
    There was a date when they were given the expectations OK?
        Mr. Cordray. OK I guess we'll leave it at that.
        Chairwoman Wilson. Time. Mr. Fitzgerald of Wisconsin,
    welcome to our Committee.
        Mr. Fitzgerald. Thank you, Madam Chair, and thank you Mr.
    Cordray for being here. This is somebody kicked the hornet's
    nest here, and that's I think obvious based on the question and
    the back and forth that's going on today. I think what's been
    exposed by the pause is that we have a system that is flawed.
        And whether it's the 60 Minutes story, or certainly
    secondary stories about parent plus loans, you know I think
    we're kind of in a territory where this is not going away, and
    I think it's something that's going to grow as we try and
    tackle the very complex issues of bringing people back online
    after they have been not making these payments obviously for
    some time.
        And it's only going to get worse I think with the extension
    of that. So my question is, and you know we have another
    freshman class that's attending college throughout this Nation.
    So are there things that are being changed beyond just the
    order that's already been offered when it comes to the entire
    student loan system?
        And I want to go back to the parent plus loans a little bit
    because that has been one of I think the most frustrating parts
    of this entire program in that what you have is and you know
    just a specific story, it was just counted in the Wall Street
    Journal where a woman had two children, they went through
    Baylor University, and she ends up with over $200,000.00 in
    student loans under her name, under a parent plus loan, and no
    ability to pay it back.
        And you just scratch your head. How could this possibly
    happen? I think part of it is that the universities continue to
    increase tuition, not really concerned about whether or not
    there is a collateral involved, or whether or not it can be
    paid back, and it just becomes more and more complex.
        Although the thing that will not go away in our
    constituents--it doesn't matter which side of the aisle you're
    on, are now completely engulfed in how do I do this, how do I
    get my loan forgiveness in place?
        I mean is the Department looking at you know moving forward
    where are we now? And how can we deal with the issues before us
    when it comes to new students as well as the repayment plans?
        Mr. Cordray. So there was a lot there. In general, I agree
    with you. Look it's an unusual form of lending that we do with
    student loans in this country where it is not risk-based, as
    most private sector lending is. And that does lead to some
    difficulties down the road.
        Having said that, you know the student loan programs as I
    understand it, and again Congress has designed these programs
    and put them in place. It's meant to strengthen this country by
    giving more access on a more even-handed basis to higher
    education, and what that means for improving people's prospects
    in life, their economic prospects and the like.
        However, you know there are challenges in this program. No
    doubt about it. There's challenges in ensuring that loans are
    repaid and making sure that's done on an even handed basis.
    There's challenges in making sure that schools are providing
    value for the money, and I think we have an obligation to have
    protective oversight there, and I don't know if I'm answering
    your specific question or not, but if I'm not, feel free to
    reframe it, but that's just my reaction to your--to what you
    had to say.
        Mr. Fitzgerald. Yes, I think Representative Castro kind of
    touched on it. You know it borders on malfeasance, and I'm
    really worried about that part of this. That if there's
    predatory loaning, and loans being made, if there are sequences
    within the program where you know there absolutely is some
    other type of motive involved, I'm really concerned about that.
        Because I think that's what the pause exposed. It exposed a
    system that quite honestly, I think many people are standing
    back and saying, listen, this is not just about loan
    forgiveness, this is about holding people accountable, and it's
    very shady. I mean this is starting to feel like you know
    something that quite honestly deserves a lot more scrutiny than
    it has been receiving in the past.
        Mr. Cordray. Well, we will do our best to hold people
    accountable, you know, maybe schools in some instances, maybe
    services in some instances, maybe borrowers in some instance.
    And would be happy to have more input from you as to how we can
    best do that as we go. It's not an easy job, no question, but
    it's an important job and we'll try to do it.
        Mr. Fitzgerald. Thank you, Madam Chair I yield back, thank
    you.
        Chairwoman Wilson. Thank you. Thank you so much. I remind
    my colleagues that pursuant to Committee practice, materials
    for the submission for the hearing record must be submitted to
    the Committee Clerk within 14 days following the last day of
    the hearing, so by close of business on November 10, 2021,
    preferably in Microsoft Word format.
        The materials submitted must address the subject matter of
    the hearing. Only a Member of the Subcommittee, or an invited
    witness may submit materials for inclusion in the hearing
    record. Documents are limited to 50 pages each.
        Documents longer than 50 pages will be incorporated into
    the record by way of an internet link that you must provide to
    the Committee Clerk within the required timeframe, but please
    recognize that in the future the link may no longer work.
        Pursuant to House rules and regulations, items for the
    record should be submitted to the clerk electronically by
    emailing submissions to edandlabor.hearing@mail.house.gov.
    Witness, again I want to thank our witness for his dedication
    today, for his participation.
        We learned so much, and we look forward to working with
    you. I told you this was an issue that was impacting America,
    and I guess you found out from testifying here today.
        Mr. Cordray. I guess I did. Yes.
        Chairwoman Wilson. Members of the Subcommittee may have
    additional questions for you, and they will submit those in
    writing to you. We ask the witness to please respond to those
    questions in writing. The hearing record will be held open for
    14 days in order to receive those responses.
        I remind my colleagues that pursuant to Committee practice,
    witness questions for the hearing record must be submitted to
    the Majority Committee Staff or Committee Clerk within 7 days.
    The questions submitted must address the subject matter of the
    hearing.
        I now recognize the distinguished Ranking Member, Dr.
    Murphy, for a closing statement. Dr. Murphy.
        Mr. Murphy. Thank you, Madam Chairman, and thank you for
    holding this meeting, and thank you Mr. Cordray for
    participating today. I just want to make a few points as we
    close out. I appreciate all the effort put into this today, but
    to be very honest with you I'm a little disappointed in some of
    the responses made by the witness.
        There was a lot of deflection saying that was for
    ``Congress to decide.'' You know many issues, like PSLF where
    Congress already has decided, we had kind of a giant truck
    driven through the statute using authority that everyone knows
    was never intended for the purpose.
        And as I said in my opening statement, the Department of
    Education, and quite frankly, yourself, have been less than
    transparent, and to put it bluntly. And I mean that's just the
    fact. We hoped you would be more prepared to answer the
    questions that this Committee proposed, because largely they're
    the same questions we sent in our letters months ago and didn't
    get very valid responses.
        And so it appears your lack of answers unfortunately, so
    it's par for the course for this administration. There seems to
    not be consistent measures of moving forward and answering
    specific questions for accountability.
        I want to reiterate as the Chairwoman just said, that we
    want and we expect answers to the questions given to you, ones
    that you said you were going to provide. Thank you, but
    regardless to your testimony, we look forward to the answers
    that this Committee has asked you to put back in writing to the
    Members who submitted them. Thank you, Madam Chairman, I will
    yield back.
        Chairwoman Wilson. Thank you. I now recognize myself for
    the purpose of making my closing statement. Thank you, Mr.
    Cordray, for your time and your work to support students and
    protect borrowers. Today we discussed the major steps the
    Biden-Harris administration has taken to support Federal
    student loan borrowers.
        In just 9 months the administration has provided 563,000
    borrowers with 9.5 billion in relief they were legally entitled
    to receive under the Higher Education Act. And as Mr. Cordray
    shared the Education Department continues to develop stronger,
    consumer protections for students and for taxpayers. While the
    Department's progress has been encouraging, the approaching
    restart of student loan requirements, and the longer-term shift
    to next gen poses major challenges for FSA.
        Student borrowers and servicers need clear guidance to
    ensure the transition back to the repayment goes smoothly, and
    that next gen fulfills the promise of a simpler, more consumer
    friendly student loan system.
        I look forward to our work ahead to ensure all student
    borrowers receive the support they need. Thank you again Mr.
    Cordray for your leadership and commitment to supporting
    students and their families. If there's no further business,
    without objection, the Subcommittee stands adjourned. Thank
    you.
        [Questions submitted for the record and the responses by
    Mr. Cordray follow:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        [Whereupon, at 1:06 p.m., the Subcommittee hearing
    adjourned.]

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