• Elizabeth Warren and John Kennedy said a pupil-loan servicer CEO may possibly have supplied fake testimony in April.
  • They mentioned PHEAA CEO James Steeley may have lied about the administration of a financial loan-forgiveness software.
  • The lawmakers are keeping a different listening to to give Steeley a opportunity to explain his testimony. 

As chair of the Senate subcommittee on financial coverage, Elizabeth Warren in April invited the CEOs of the country’s big student-mortgage servicers to testify on the impact of college student financial debt on borrowers.

She, and the subcommittee’s Republican ranking member, John Kennedy, say that one particular of them may perhaps have provided fake testimony.

On Wednesday, Warren and Kennedy sent a letter to Pennsylvania Greater Schooling Help Agency (PHEAA) CEO James Steeley regarding “what appear to be fake and misleading” statements from his testimony throughout the hearing. PHEAA administers the Public College student Mortgage Forgiveness (PSLF) system, which forgives university student loans for community expert services workers soon after 120 month-to-month qualifying payments.

Citing facts supplied by the Schooling Section, the senators wrote in their letter than Steeley incorrectly mentioned that PHEAA has not been penalized for mismanaging the PSLF, which they mentioned is a “serious matter.”

“Our hearing was held in section to understand the role of student bank loan servicers and the extent to which they bear duty for the myriad failures of the college student financial loan plan,” the senators wrote. “But it seems that you have failed to offer precise information about your firm, undermining the Subcommittee’s actuality-locating job and probably misleading committee users and the public.”

For the duration of the testimony, Warren first asked Steeley if PHEAA’s automated method mistakenly disqualifies payments, to which Steeley responded: “I am sorry, Senator. I you should not think that that is right.”

Warren then asked if the Education and learning Section has ever penalized PHEAA for mismanagement, and Steeley claimed it had not. 

But Training Office opinions instructed the opposite. Warren and Kennedy cited nine critiques considering that 2016 that exposed difficulties with the servicer’s implementation of PSLF, ensuing in 4 corrective action ideas and two fines, each and every extra than $100,000.

“It is not obvious how or why you supplied information and facts that seems to be inaccurate: while it is inexplicable that you have been not mindful of this sequence of Schooling Department results and penalties relating to your firm, it is equally incomprehensible that you would have subjected your self to felony penalties by ‘knowingly’ and ‘willfully’ offering fake information and facts to Congress,” Warren and Kennedy wrote.

President Joe Biden campaigned on reforming PSLF, but Insider reported previously this month that 98% of applicants are however currently being rejected from the system considering the fact that Biden took business office, in accordance to Training Section knowledge.

Biden’s regulatory agenda also incorporates reviewing PSLF and “designs to seem at these polices for advancements,” but no further more depth was delivered on what the described improvements would seem like.

The lawmakers will be keeping a adhere to-up listening to to give Steeley the opportunity to reveal the inaccuracies in his testimony.

PHEAA did not immediately answer to Insider’s ask for for remark.