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The following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat.


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WASHINGTON DC – United States Senators Elizabeth Warren (D-Mass.), Jeff Merkley (D-Ore.), Dick Durbin (D-Ill), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), and Tina Smith (D-Minn.) sent a letter to Secretary of the U.S. Department of Education (ED) Betsy DeVos raising serious concerns about reports that one of ED’s federal student loan servicers, Great Lakes Educational Loan Services, Inc. (which is owned by Nelnet, Inc., another federal student loan servicer), provided incorrect payment information for nearly five million federal student loan borrowers to credit reporting agencies, likely lowering many of their credit scores.

The senators demanded in their letter that ED “take immediate action to fully remedy this issue, hold Great Lakes accountable for this inexcusable blunder, and provide Congress with a detailed accounting of how this breakdown occurred.”

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) included provisions to provide immediate, temporary relief to federal student loan borrowers during the COVID-19 emergency by suspending payments and interest accrual for all borrowers with federally-held loans through September 30, 2020 and prohibiting ED from engaging in involuntary collections activity for this same time period.

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CARES Act implementation guidance included the directive that “any payment that has been suspended (be) treated as if it were a regularly scheduled payment made by a borrower,” in order to protect borrowers from any penalties to their credit ratings during the pandemic.

Instead, Great Lakes erroneously reported the CARES Act suspension of 4.8 million borrowers’ monthly payments as a “deferment,” a mistake that appeared on these borrowers’ credit reports and potentially triggered a lower credit score for millions of borrowers-a mistake the Department dismissively characterized as a “coding error.”

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“It is difficult to know how far reaching the consequences of this error will be for millions of borrowers who might attempt to purchase a home, start a new job, or take out a loan to stay financially afloat during this economic crisis,” the senators wrote in their letter. “Any error that results in an inaccurate score must be immediately remedied, and those responsible for such mistakes must be held accountable.”

These errors, the senators point out, could also be a violation of the Fair Credit Reporting Act, which prohibits furnishers of credit information like Great Lakes from reporting information if a company “knows or has reasonable cause to believe that the information is inaccurate.”

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To honor its commitment to hold the “appropriate parties accountable,” the senators have requested ED take the following actions and provide the senators with an update on the Department’s progress by June 19, 2020:

  • Take immediate action to fully remedy this issue, including through direct communications with the credit reporting companies and direct communication with affected borrowers;
  • Ensure the CFPB has access to all necessary information, including all relevant documents, data, and borrower files requested by the Bureau, to conduct an examination of servicers’ compliance with the law, including the Fair Credit Reporting Act, and to identify any areas of noncompliance with applicable federal consumer protection laws;
  • Investigate whether Great Lakes properly followed the Department’s directives and make a “formal determination” as to whether Great Lakes violated these directives or its contract with the Department;
  • Take immediate and aggressive action to hold Great Lakes accountable for this mistake, including through any consequences or penalties allowed under the Department’s contact with Great Lakes, which may include the reduction of loan volume;
  • Take no action to oppose or obstruct any borrowers’ lawsuit(s) against Great Lakes, and allow the production of any relevant documents or materials in the course of such litigation; and
  • Conduct an audit of all servicers’ compliance with the CARES Act to ensure this error is isolated to Great Lakes and to identify any other areas of noncompliance with the law, the Department’s directives, or contracts with the Department;
  • Report the results of any investigation or audit related to this matter to the public and to Congress, including any corrective action the Department takes; and
  • Provide our offices with:
    • A complete timeline of all actions taken between March 27, 2020 and today related to the implementation of Sec. 3513(d) of the CARES Act by the Department (including FSA) and federal student loan servicers, including copies of any applicable contract modifications, guidance, or other written communications;
    • All communications between the Department and any of the following financial companies between March 27, 2020 and today:  Credit Karma, Experian, Equifax, TransUnion, Fair Isaac Corporation, Innovis, or VantageScore LLC;
    • All communications between the Department and the CFPB related to the issues identified in this letter; and
    • All summary of all communications between Great Lakes and/or Nelnet and any of the following financial companies related to the issues identified in this letter: Credit Karma, Experian, Equifax, TransUnion, Fair Isaac Corporation, Innovis, or VantageScore LLC.

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By editor

Susan Petroni is the former editor for SOURCE. She is the founder of the former news site, which as of May 1, 2023, is now a self-publishing community bulletin board. The website no longer has a journalist but a webmaster.