One out of every seven borrowers with student loan debt falls behind on payments within three years. The question is: Who should pay for those missed payments? Under a new proposal from three Senate Democrats, the schools should be on the hook.
Before Christmas, senators Elizabeth Warren (D-Mass.), Jack Reed (D-R.I.), and Dick Durbin (D-Ill.) released a slate of proposed reforms aimed at lowering student debt. In addition to a student borrower’s bill of rights that would put more emphasis on getting servicers to offer students affordable repayment plans, the senators want schools with lots of struggling borrowers to compensate the government for loan repayment losses.