NEW: Biden admin officials are grappling with how to resume collecting student loan payments from millions of Americans – as a funding shortfall forces Ed Dept to cut customer service for borrowers.

politico.com/news/2023/04/2… Ed Dept officials, Dems, consumer groups worry the admin may not have enough money to smoothly transition borrowers back into repayment.

Reduced call center hours. Longer hold times. Potentially slower paperwork processing. Extra outreach for at-risk borrowers in limbo.

NEW: Biden admin in Sept quietly granted Navient a two-year, $391M extension on its contract to collect federal student loans.

It came just before Navient announced last wk it wants @usedgov to approve a transfer of its ~6M accounts to another company.

subscriber.politicopro.com/article/articl… The extension is latest wrinkle in complicated reshuffling of @usedgov’s student loan servicing landscape this year.

But some longtime critics of Ed Dept’s handling student loan servicing see latest Navi extension as emblematic of “too big to fail” contractors at the agency.

Biden admin today is unveiling a series of policies aimed at boosting the number of public service workers who qualify for a troubled federal student loan forgiveness program -- responding to growing calls by unions & Democrats to fix it.

subscriber.politicopro.com/article/2021/1… ➡️ Ed Dept says it will invoke emergency pandemic-related powers to temporarily waive some typical PSLF requirements.

It’ll retroactively count payments that public service workers made on ineligible types of federal student loans or repayment plans.

Another federal student loan servicer is calling it quits -->

Granite State Management & Resources, which has 1.3M borrower accounts, says it won't seek renewal of contract w/ @usedgov after Dec. 31.

subscriber.politicopro.com/article/2021/0… @usedgov Granite State is dropping out after same decision by the much larger PHEAA/Fed Loan Servicing (~9M borrower accounts) earlier this year.

Biden admin is now going to have to reassign ~10M borrower accounts this fall.

Full statement from @FSACOO Rich Cordray:

New - @usedgov says it needs an extra year to implement the major overhaul to the FAFSA that Congress approved in Dec.

The new, simplified aid application won't debut until 2024-25 school year -- instead of 2023-24 as required in the law, @FAFSA says.

subscriber.politicopro.com/article/2021/0… Background on the bipartisan deal that's supposed to drastically reduce questions on the FAFSA (from 108 to 36) -- it was included in the year-end govt spending & covid relief deal that Trump signed in Dec.:

politico.com/news/2020/12/2…

New – Key Congressional leaders have agreed to reinstate Pell grants for incarcerated students as part of a deal on a package of higher ed policies expected to be included in year-end omnibus spending bill, per aides:

subscriber.politicopro.com/article/2020/1… Deal would lift longtime ban on Pell for incarcerated students that Congress imposed in '94 crime law signed by Bill Clinton & championed by then-Sen. Biden.

House approved bill w/ provision eliminating ban on Pell for prisoners over the summer.

House Democrats are significantly scaling back the student loan forgiveness provisions in their $3T coronavirus relief package, citing concerns about the cost:

subscriber.politicopro.com/article/2020/0… Initial plan would have provided up to $10K in loan forgiveness to all borrowers:

Revised plan would limit the $10K in loan forgiveness only to those borrowers who were “economically distressed” on the day *before* Trump declared a coronavirus national emergency (March 12).