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Office of the
Illinois Attorney General
Kwame Raoul

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September 29, 2023

Chicago – Attorney General Kwame Raoul, as part of a coalition of 19 attorneys general, today called on the federal government to do more to mitigate potential harm to federal loan borrowers as student loan payments are set to resume in October.


In a comment letter, Raoul and the attorneys general express concern that although the federal government has opened potential additional avenues toward debt relief, these avenues are of limited use in resolving return-to-repayment problems and do not address the problem of interest accrual.

“It is clear the federal government is not prepared to handle the high level of complex inquiries from borrowers who are set to begin resuming their student loan payments shortly,” Raoul said. “More must be done to ensure borrowers have access to resources necessary to understand their individual repayment situations.” 

Raoul reminds student borrowers who have questions or are in need of assistance to call the Attorney General’s Student Loan Helpline at 1-800-455-2456, or file a consumer complaint by visiting the office’s website.

Raoul and the coalition highlight that more than 40 million borrowers are set to resume making payments in October following a three-and-a-half-year pandemic payment pause. In that time, a majority of loans were transferred to new servicers, causing concern that tens of millions of borrowers will simultaneously be required to navigate a complex system, many for the first time, with new servicers that have little to no experience with such volumes and do not appear to be sufficiently staffed to respond to them.

Additionally, some servicers appear to be struggling to operationalize implementation of the SAVE plan, the new, more affordable income-drive repayment plan. For example, earlier this month, MOHELA, the servicer that manages all accounts on track for public service loan forgiveness, had to reissue payment notices for borrowers in SAVE. This became necessary because MOHELA’s original notices, issued in August 2023, listed a higher monthly payment than allowable under the SAVE guidelines that took effect in July 2023.

Although the Biden administration has taken significant steps to transform the broken federal student loan repayment system, Raoul and the attorneys general caution that current circumstances are likely to create serious and widespread loan servicing problems, especially as the U.S. Department of Education itself appears to lack capacity to assist borrowers, oversee servicers and enforce borrower protections during the return to repayment.

Raoul and the coalition urge the federal government to do more to mitigate possible harm to borrowers, including instructing its servicers to liberally place borrowers affected by servicing errors into forbearance. The letter asks that the same forbearance be applied for groups of borrowers who are awaiting loan forgiveness.

The Illinois Attorney General’s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education field. In June, Raoul issued a consumer alert urging student loan borrowers to be aware of scam calls, emails and letters from fraudsters pretending to be loan servicers or promising debt relief following the U.S. Supreme Court’s decision striking down the federal government’s student loan debt forgiveness plan. In January 2022, Raoul announced a $1.85 billion settlement with Navient, formerly the nation’s second largest student loan servicer, to resolve allegations of widespread abuses in their student loan origination and servicing business.

Attorney General Raoul’s office also worked to pass a “Know Before You Owe” law, which aims to alert borrowers of their remaining federal student loan eligibility to help them steer clear of predatory private loans like those provided by Navient.

Joining Raoul in sending the letter are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New York, Oregon, Pennsylvania, Vermont, Washington and Wisconsin.