Key Points
- A coalition of 89 groups, including the AFL-CIO, AFT, and NAACP, asked four congressional committees to hold an emergency hearing on student loan servicing failures.
- The letter cites wrong payment amounts, false past-due notices, and lost PSLF credit since the July 1 repayment overhaul.
- The Education Department defended the changes as “historic reforms to simplify repayment.”
A coalition of 89 advocacy groups, unions, and nonprofits is asking Congress to convene an emergency hearing on the student loan system, citing servicing errors and confusion that have followed the repayment overhaul that took effect July 1.
The letter (PDF File), was led by Protect Borrowers and Young Invincibles and signed by groups including the AFL-CIO, the American Federation of Teachers, the National Education Association, the NAACP, and the UAW.
The letter went to the chairs and ranking members of four committees: Senate HELP (Bill Cassidy and Bernie Sanders), Senate Banking (Tim Scott and Elizabeth Warren), House Education and Workforce (Tim Walberg and Bobby Scott), and House Financial Services (French Hill and Maxine Waters).
It asks them to “engage in critical oversight and convene an emergency hearing” to hold the Education Department and its federal student loan servicers accountable.
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Why It Matters
The letter comes at a time when roughly 7 million borrowers are being moved off the SAVE plan and into potentially higher-cost repayment options. The coalition estimates a typical SAVE borrower could pay more than $4,000 more per year under the new Repayment Assistance Plan (RAP), and says some borrowers have already reported payment increases of more than $500 a month.
Errors are making this entire transition harder to budget for. When a servicer sends the wrong payment amount or a false delinquency notice, borrowers can’t plan around a payment number they can’t trust.
The Errors Cited In The Letter
The coalition lists problems borrowers reported from May through August 2026:
- Conflicting SAVE notices. After the Education Department said in May that 7 million-plus borrowers would receive 90-day transition notices, borrowers reported contradictory messages from the department and servicers. Some servicer accounts still showed SAVE forbearance running until 2028.
- $50 payment notices that were wrong. In June, more than 6,000 borrowers were told their payment would be $50 a month, then were charged much higher amounts. Some had to reapply for an income-driven plan from scratch.
- Long hold times in July. Borrowers reported waiting “countless hours” to confirm their new payment amounts.
- Married borrower and IBR problems. Attorneys reported IDR payments for married borrowers that weren’t prorated for a spouse’s debt, wrongful IBR denials for some consolidated loans, and early payment increases for borrowers who had consented to automatic recertification.
- False past-due notices in August. Some borrowers still in the SAVE forbearance received notices saying they were behind and at risk of default, similar to the MOHELA glitch that sent false past-due notices.
- Lost PSLF credit. In August, borrowers saw Public Service Loan Forgiveness payment counts drop with little explanation. The department attributed the changes to fixing coding errors.
This is not cited in the letter, but borrowers still do not have a paper RAP application they can use yet either. Paper applications can sometimes help with these issues, but they’re not available.
The Numbers Behind The Request
The coalition says 25% of student loan borrowers are behind on a loan and more than 9 million, or 1 in 5, are in default. It puts delinquency rates near 50% for Black and Native American borrowers, and says delinquent borrowers’ credit scores have dropped 57 points on average over the past year.
The groups warn that if borrowers leaving SAVE default at the same rate as others, the number of borrowers in distress could reach 17 million or more.
Readers should note the letter does not footnote the sources for these figures, and different datasets measure delinquency differently. The New York Fed’s most recent quarterly data, for example, showed student loan delinquencies falling to 7.83% from 12.88%. Federal Student Aid data earlier showed 7.7 million borrowers in default.
Until we have updated reporting, it’s impossible to know which is truly accurate. But – none are that great to begin with…
The Oversight Gap
The letter argues these errors are piling up while federal oversight shrinks. A Government Accountability Office report found the Education Department had stopped monitoring servicer calls and reviewing borrower data for accuracy. The coalition also points to staffing cuts in the Federal Student Aid Ombudsman Group, which has left borrower complaints stuck in a backlog.
The Consumer Financial Protection Bureau (CFPB), the other federal agency that has policed servicers, told staff in an internal memo last year to “deprioritize” student loan oversight. The administration has also pushed to cut most of the CFPB’s workforce.
The letter argues the CFPB has been gutted just as more students and families are forced to rely on the private student loan market, which the bureau oversees.
What Borrowers Can Do Now
Don’t wait on Congress to fix a servicer mistake. Screenshot payment notices, save call reference numbers, and check your payment count on StudentAid.gov after every change.
If a servicer won’t correct an error, file a complaint with the Student Loan Ombudsman and document the date. PSLF borrowers who lost months should keep employer certifications current and review our breakdown of PSLF requirements after SAVE ends.
What’s Next
The decision sits with the four committee chairs, all Republicans, who control hearing schedules. Watch whether ranking members Sanders, Warren, Bobby Scott, or Waters press the chairs publicly, and whether any Republican chair takes up the request.
Separately, the bipartisan PSLF Inclusion Act would count SAVE forbearance months toward forgiveness, a proposed fix for borrowers who lost PSLF progress during the transition.
The bottom line is all pathways lead to Congress, and borrowers who want to see change should be contacting their members of Congress.
Read the full letter: Coalition Letter Calling for Oversight, September 2026 (PDF)
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.