[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 
on the platform, make sure you are muted, and use your phone to 
immediately call the Committee's IT director whose number was 
provided to you in advance.
    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 [email protected]. 
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:]


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

                            [all]