Elizabeth Warren and Ayanna Pressley want to know how 9 student loan companies will avoid causing 'grave harm to borrowers' while implementing Biden's debt cancellation

• In August, Biden announced up to $20,000 in federal student-loan forgiveness.
• Elizabeth Warren and Ayanna Pressley requested information from loan companies on how they will carry out the relief.

Student-loan companies are tasked with carrying out President Joe Biden's student-loan forgiveness — and two Democratic lawmakers want to ensure the process goes as smoothly as possible.

At the end of August, Biden announced $10,000 to $20,000 in student-loan forgiveness for federal borrowers making under $125,000 a year. Massachusetts Sen. Elizabeth Warren and Rep. Ayanna Pressley want to ensure the nine companies who service those loans are prepared to implement that relief effectively.

In a letter provided exclusively to Insider on Monday, Warren and Pressley asked the heads of each of the companies to provide an update on how they plan to deliver "accurate and timely information" on the recently announced relief, along with other reforms to the student-loan system.

"Servicers must ensure that they are appropriately staffed to handle the increased volume of borrowers calling to get information about the administration's recent announcements, that they are providing accurate information to borrowers, that they have strong systems in place to ensure balances and payments are adjusted accurately, and that borrowers are notified about these changes on a timely basis," Pressley and Warren wrote.

"Failure to do so would cause grave harm to borrowers," they added.

The two lawmakers noted events that have already caused confusion with student-loan borrowers. They cited a report from Insider that found one company, Nelnet, mistakenly told some borrowers they had payments due on September 1 in August. And, in an accompanying letter, Warren and Pressley requested information from Navient following a report from Insider that found the company was giving borrowers the option to refinance their debt into private loans, making them ineligible for loan forgiveness.

"We're putting the servicers on notice," Pressley told Insider. "It's imperative that servicers provide borrowers with accurate and up-to-date information on their student loans. Thanks to President Biden's plan to cancel student debt, millions are now eligible for meaningful student loan debt cancellation and we need to ensure it is administered efficiently and felt by as many people as possible. Senator Warren and I want answers."

To ensure the companies are communicating effectively with borrowers on relief, the lawmakers requested information on the guidance the companies are sending out to borrowers surrounding broad student-loan forgiveness, reforms to the Public Service Loan Forgiveness (PSLF) program, and reforms to income-driven repayment (IDR) plans by September 26.

Last year, the Education Department announced reforms to PSLF, including a temporary waiver through October 31, 2022 that would allow past payments to count toward forgiveness progress, including those previously deemed ineligible. As the lawmakers noted, this expiration date is soon approaching and they want to ensure companies are communicating the timeline to borrowers — along with benefits borrowers can receive from a new, income-driven plan the department will roll out intended to lower monthly payments once the student-loan payment pause ends next year.

Even before Biden announced relief, lawmakers were expressing concerns with loan companies' abilities to effectively implement the relief. In a June letter, Minnesota Rep. Ilhan Omar led her Democratic colleagues in writing to the Education Department to ensure companies were prepared to "deliver debt cancellation quickly and efficiently, no matter the effort and resources required."

But the companies themselves have warned the department of issues that could arise with implementing this relief. Scott Buchanan, the executive director of the Student Loan Servicing Alliance — a group that represents federal servicers — previously told Insider that it could take "months to operationalize" Biden's announcement. He later wrote in a letter to Education Secretary Miguel Cardona that the debt relief "risks operational disruptions."

The department maintains it has the ability to carry out this relief and said borrowers should prepare to apply for loan forgiveness in early October.