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Elizabeth Warren wants new leadership to oversee student loans — and calls the Betsy DeVos era a “disaster.”

The Coronavirus Relief Bill was passed in March when Congress ordered the Ministry of Education to stop granting borrowers by default to student loans as part of the CARES Act. It took a few months Thousands of people feel the impact on their salary.

The department has refunded more than $ 186 million in wages seized during the suspension, but even today some borrowers may have lost the funds they are entitled to. As of mid-October, court documents said that 509 employers had sent the borrower’s wages to the agency for the defaulted loan.

These companies may be sending money seized from employee salaries to the government, but we don’t know. On October 30, the ministry closed the PO Box to which the employer was sending these funds.

According to a status report filed by the Department in late January as part of a proceedings over implementation, “The Department has not received payment or information regarding the number or identities of wage-granted borrowers or employees still granted. Of the CARES method.

The wage guarantee episode is a prominent example of the type of task that the Federal Student Aid Department challenges on a daily basis. Operation is complicated. High stakes for government contractors, employers, and the FSA itself — and borrowers to turn the wage guarantee system on and off.

The office oversees the government’s approximately $ 1.5 trillion federal student loan portfolio, paying loans and grants sent to schools on behalf of students, and monitoring and relieving companies that collect borrower student loan payments. Implementation of repayment programs, and more.

President Joe Biden introduces a candidate for Secretary of Education in December 2020. The Chief Operating Officer for Federal Student Assistance, which oversees the government’s student loan portfolio, was appointed by former Secretary of Education Betsy DeVos.

Nicholas Kamm / Agence France-Presse / Getty Images

“The CARES law has stopped decorating wages.”

“The CARES law has stopped decorating wages. In order for it to be effective, the FSA had to do it right away,” said one of the organizations representing the borrowers in the wage guarantee proceedings. Daniel Zibel, Chief Advisor and Vice President of the National Student Legal Defense Network, said. “It obviously didn’t happen.”

The FSA is now commanded by Mark Brown, a major retired Air Force general. Appointment Former Secretary of Education Betsy DeVos became Chief Operating Officer in 2019. However, the challenges the office faced during Brown’s tenure raised the question of whether President Joe Biden would appoint him. Programs under the jurisdiction of the FSA.

“Whether it’s incompetence, maliciousness, or a combination of both, the Ministry of Education student loan bank under Betsy DeVos is a disaster and borrowers struggling thousands during the pandemic. I oversaw the illegal decoration of wages, “Democratic Senator Elizabeth Warren said in a statement to MarketWatch. “Students deserve leadership in this office, which makes this program work for students in accordance with the law.”

The department and FSA did not respond to the request for comment.that’s all summer, A spokesman for the Trump administration contacted the employer regularly by mail or phone to stop granting wages when about 2,800 borrowers were seized despite the suspension. He said he was.

The pandemic and the financial remedies needed to stop it were surprising, but FSA officials are struggling to manage a cumbersome student loan system months before COVID-19 becomes a national emergency. I knew that.

October 2019, Federal Judge DeVos held for contempt of court After a student loan servicer hired by the department, despite a court order, demanded a refund of wages and taxes from a borrower who was a victim of fraud and continued to seize Video statement announcing the day Brown said the agency was “fully responsible” for the matter.

“One of the things Secretary of Education Betsy DeVos has imposed on me is to provide outstanding customer service to more than 42 million federal student loan borrowers,” Brown said in a video. “I’m here today to discuss cases that don’t meet our own standards.”

FSA leadership, goals and standards are evaluated differently than most other areas of government. FSA is known As a performance-based organization, A structure created in the 1990s as part of the then Vice President Al Gore’s Government Reinvention Initiative.

This design was inspired by Margaret Thatcher’s similar idea in England. This allowed the heads of some government agencies to act like CEOs in the private sector or organizations like private companies.

The FSA gives civil servants greater flexibility in hiring and compensation, including the ability to pay bonuses to some senior executives. In addition, they are responsible for focusing on a set of strategic goals and outcomes as part of the five-year performance plan requested by Congress and set by the Secretary of Education and the FSA COO.

The concept behind the FSA’s special structure is to give leaders “the tolerance they need to do a good job,” said Claire, a think tank deputy director of federal higher education policy in New America.・ McCann said. That latitude also means that the COO has some protection from political whims.

Their term is five years and the Secretary of Education can only dismiss him for good reason. Therefore, the head of FSA usually does not change depending on the administration. However, the president can remove the COO at his discretion.

“It’s time to reset how the Department of Education handles student loans,” said Randi Weingarten, president of the American Federation of Teachers. Weingarten organization Is active Helping members gain access to promised student loan bailouts, including a public service loan forgiveness program that has been plagued by challenges.

“The pandemic only exacerbated the pain.”

“Student loan banks under DeVos seemed to intend to hurt the borrower rather than help it, and the pandemic only exacerbated the pain,” she said. “Now is the time for a new start, and FSA’s new leadership can make it happen.”

In the future, if the Biden administration wants to carry out many of its campaign promises to fine-tune the student loan system, it will require the cooperation of the FSA and its leaders to make them successful.

For example, an administrative officer Said They want to reform PSLF and increase revenue-driven repayments. This allows the borrower to repay the debt as a percentage of the income.

Supporters, including organizations like NSLDN, Also, The new administration will take other steps that may cause FSACOO to get stuck or block uninterested. These proposals include expanding the scope of debt exemption for borrowers who attended a school that eventually collapsed and more actively monitoring for-profit universities.

These requirements occur when “FSA has a wide range of administrative challenges.”

Brown has run a third office since 2017. In May of that year, James Lancy, who was appointed during the Obama administration, Resigned 3 years early“I am very concerned that there are significant constraints on resource allocation and prioritization, decision making, and the fulfillment of an organization’s mission,” the Washington Post wrote in a letter to staff at the time. I am.

DeVos replaced Runcie with A. Wayne Johnson, The former Private student loan And credit card executives, Replaced by brown In March 2019, and finally in October of that year, I left the agency and asked to cancel my student loan. His way home..

“It’s a little unicorn — what you really need at FSA,” McCann said. “It will be very important to make sure that this person can be strong on the management side.”

Authorities often separate FSA managers from the private sector, but McCann said COOs require a combination of skills not found in banks, such as political knowledge and government procurement experience. ..

“If I chose the place I thought this person was probably, I think they were working at the IRS at some point,” she said. “These systems are just as old and complex.”

Elizabeth Warren wants new leadership to oversee student loans — and calls the Betsy DeVos era a “disaster.” Elizabeth Warren wants new leadership to oversee student loans — and calls the Betsy DeVos era a “disaster.”

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