Elizabeth Warren, Ed Markey

Democratic U.S. senators from Massachusetts, Sen. Ed Markey and Sen. Elizabeth Warren. (AP File Photo/Michael Dwyer, File)

(Michael Dwyer)

SPRINGFIELD ‒ With the recent enactment of language allowing loan servicers to "robocall" Americans' cell phone and landlines to collect debts owed or guaranteed by the federal government, U.S. Sens. Elizabeth Warren, D-Mass., and Ed Markey, D-Mass., urged the Department of Education this week to refrain from using the new authority.

The Massachusetts senators, in a letter to Education Secretary Arne Duncan, asked the agency to direct federal student loan servicers, debt collectors and other third parties to not use robocalling to collect student debt until regulations are issued and the department shows "with concrete evidence" that the practice is in the best interests of borrowers and taxpayers.

"The department has an obligation to demonstrate with data that the use of this authority will provide net benefits for both student loan borrowers and taxpayers and will not result in potentially abusive debt collection practices," the senators wrote. "In the absence of such data, the department should not direct anyone, including third party debt collectors, to use robocalls to collect student loan debt."

Warren and Markey also asked for the agency's interpretation of the scope of Title III - the section of the Bipartisan Budget Act of 2015 that authorized robocalling for federal debts. They questioned whether the department believes robocalling cannot be permitted until the Federal Communications Commission issues implementing regulations required by Title III, as well as whether it agrees that the new language allows collectors to robocall borrowers' relatives or references.

Warren argued that the federal government "should focus on giving students the tools they need to repay their debts and to avoid default - not on squeezing them even harder."

"The new robocalling provision raises real concerns and the Education Department should not use this authority without evidence that it would benefit borrowers and taxpayers," she added.

Pointing to the legal protections that have long shielded consumers from automated, unsolicited debt collector phone calls - including the Telephone Consumer Protection Act that required callers to have a party's consent before using automated dialing equipment - the senators, in their letter, contended that the new budget bill eliminates such safeguards.

"We are concerned that this provision will subject student loan borrowers to a barrage of unsolicited calls - and possibly leave them with no refuge to stop the calls," they wrote. "We are especially concerned that this provision will allow debt collectors to call and text borrowers on their cell phones even in instances where the borrower is charged for the call, or instances that would cause significant financial difficulty to low-income users of Lifeline programs and other cell phone programs with limited usage requirements."

Although the Department of Education pushed for the language, arguing that Congress should ensure servicers can contact borrowers with modern technology and help them avoid the consequences of default, the senators said, the agency "has offered no evidence that robocalling with achieve these pro-borrower outcomes."

They added that little evidence exists to suggest robocalling will help the federal student loan program by generating "meaningful revenue," saying while the Office of Management and Budget estimates it would generate $12 million annually, the Congressional Budget Office has projected the authority would generate no revenue in the next 10 years.

Markey, who previously spoke out against the budget provisions, stressed that the Department of Education needs to "ensure that cell phones don't start ringing with intrusive and aggressive robocalls until strong regulations protecting students are put in place."

He has introduced legislation to strike down language included in budget bill, signed into law last month, that exempts callers collecting debt owed or guaranteed by the federal government from TCPA provisions - including a requirement for callers to have consent before making auto-dialed or prerecorded calls or texts.

Despite the senators' criticism, ACA International, the Association of Credit and Collection Professionals, which represents third-party collection agencies, law firms, asset buying companies, creditors and vendor affiliates, has praised the budget language, with its CEO Patrick Morris saying "this type of relief should apply to all businesses seeking to provide normal, expected or desired information to their customers."

U.S. Sens. Mike Lee, R-Utah, and Orrin Hatch, R-Utah, joined Warren, Markey in signing the letter, which asks the department to respond by Jan. 11.