Markus Andrews

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Company: Performance Food Group (PFGC)
Business: Performance Food Group is a food and foodservice distribution company that operates through three segments: foodservice, specialty (formerly “Vistar”), and convenience. Its foodservice segment distributes a line of national brands, customer brands, and its proprietary-branded food and food-related products to independent and multi-unit chain restaurants and other institutions. Its specialty segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. Its convenience segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice related products and other items to convenience stores across North America. It markets and distributes over 250,000 food and food-related products to customers across the United States from about 144 distribution facilities to over 300,000 customer locations in the food-away-from-home industry.
Stock Market Value: $16.34 billion ($104.40 per share)

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Performance Food Group shares year to date

Activist: Sachem Head Capital Management

Percentage ownership: ~2 – 4%
Average Cost: n/a
Activist Commentary: Sachem Head was founded in 2013 by Scott Ferguson, the first investment professional hired at Pershing Square, where he worked for nine years. Sachem Head has a history of solid value investing, but we believe that they really found their activist stride in 2020 with their investment in Olin. Scott Ferguson took a board seat at Olin – the first public company board seat he took in an investment that was not part of a group – and created tremendous value there. More recently, after nominating a majority director slate, Sachem Head settled for three board seats at US Foods, and most recently settled for a board seat at Twilio in April 2024. Taking board seats signifies both commitment and contribution and this philosophy and style is really paying off for Sachem Head.
What’s happening
On Aug. 21, Sachem Head delivered a nomination notice for the following four candidates to stand for election to Performance Food Group’s Board at the 2025 Annual Meeting: Scott D. Ferguson, David A. Toy, R. Chris Kreidler and Karen M. King. Additionally, Sachem Head has urged the company to explore a potential business combination with US Foods and, absent a transaction, further improve margins.
Behind the scenes
Performance Food Group is the third largest foodservice distribution company in North America, behind Sysco and US Foods, which all together command approximately 38% market share. The company operates through three segments. The core foodservice segment (61.8% of EBITDA) distributes national, customer, and proprietary-branded food and food-related products. Convenience (20.6%) distributes candy, snacks, beverages, cigarettes, and other tobacco products to convenience stores. Specialty (17.61%) distributes candy, snacks, beverages and other items to specialty vendors.

On Aug. 21, Sachem Head delivered a nomination notice for the following four candidates to stand for election to PFG’s board at the 2025 Annual Meeting: Scott D. Ferguson (founder and managing partner of Sachem Head), David A. Toy, R. Chris Kreidler and Karen M. King.
Additionally, Sachem Head has urged PFG to explore a potential business combination with US Foods and, absent a transaction, further improve margins.
Ferguson and Toy previously served together on the US Foods board as part of a Sachem Head Cooperation Agreement. At US Foods, Sachem Head helped install a new CEO and management team, which catalyzed a successful turnaround for the company. Since Sachem Head filed its 13D at US Foods, the company’s stock has more than doubled.
The other two candidates have just as much experience: Kreidler was the CFO for Sysco for six years and King is an executive vice president at McDonald’s and serves on the Aramark board. This is an all-star team of nominees that are well positioned to navigate PFG through operational improvements and a strategic evaluation.
While there is an opportunity to improve operating margins at the company, the main catalyst here is the merger with US Foods. The potential synergies that could be attained in such a combination make it very hard to ignore. These synergies are evident from another proposed industry consolidation, Sysco’s 2013 attempt to merge with US Foods. Publicly, this deal was projected to deliver annual synergies of at least $600 million within three to four years relative to US Foods’ $826 million of EBITDA at the time. In other words, the projected synergies represented more than 70% of US Foods’ EBITDA, and the numbers that were thrown around privately were even larger. This is an extraordinary figure, and largely unique to the food distribution landscape and the amount of purchasing, logistics and warehouse rationalization synergies that these companies have. Extrapolating these numbers to a US Foods/PFG merger and applying similar levels of synergies using the EBITDA of PFG’s foodservice segment ($1.2 billion), which holds most of the synergistic potential, a merger could be expected to yield $800 million to upwards of $1 billion in synergies. Moreover, if there is anyone who could validate this analysis, it would be Sachem director nominee Chris Kreidler, who was the CFO of Sysco at the time.
However, the Sysco/US Foods deal was ultimately blocked by the Federal Trade Commission due to antitrust concerns centered around a merger of #1 and #2 that would eliminate Sysco’s only national competitor. There are a few reasons why a merger between US Food and Performance Food Group may have a different outcome. First, this would be a merger of the second and third largest players, rather than first and second; and unlike Sysco, PFG is not a national competitor, with little to no footprint on the West Coast. Additionally, today’s regulatory environment under the Trump administration is significantly more favorable than it was when the Sysco deal was reviewed under the Obama administration. While any approved deal would likely require divestitures in certain markets and there is no guarantee of an approval, with potential synergies like this, the Board owes it to its shareholders to at least explore the possibility of a US Food merger. And that is all Sachem Head is asking. They are not forcing the company to sell but rather pleading with them to evaluate this potentially lucrative opportunity that has been brought to them.
In July 2025, US Foods confirmed in an 8-K filing that they had approached PFG about a potential combination. But it takes two to tango and, so far, PFG has not meaningfully engaged with them. Given this current sentiment, sincere consideration of this transaction appears unlikely to occur without asserting a little pressure on the board, and Sachem Head is doing that in the form of a threatened proxy fight that they would have an excellent chance of winning. Not only are proxy fights about the power of the argument, and Sachem Head has a great one here, but the company’s shareholder base contains many alternative asset managers that are more likely to support an activist agenda like this than the traditional index funds. These shareholders have a history of being receptive to good activist campaigns and the potential upside this plan could deliver and would also be impressed by the strong slate Sachem Head is nominating should be enough for them to hear the fund out.
Moreover, there is speculation that even prior to Sachem Head’s engagement, changes in the C-Suite were imminent. For more than 17 years, the company has been run by CEO George Holm, a widely respected industry leader. Now, it has been rumored that Holm will soon step down, likely to be replaced by the company’s President Scott E. McPherson. A CEO transition like this creates the perfect time for a strategic transaction for everyone involved, except maybe McPherson. When two companies of similar size merge in a merger of equals, valuation is often the easy part. It is the social issues that are often the dealbreakers. And that dynamic could be exacerbated when the merger is proposed just as the sitting president is finally getting the call up to CEO. However, McPherson hasn’t been a PFG lifer and has only been with the company for a year and a half, so the social issues surrounding leadership of the surviving entity should be achievable.
Boards and their advisors and certain shareholders often viscerally oppose any type of “sell the company” activism, and often for good reason. Often, we are the biggest critics of that type of short-term activism that gives the future value creation to a private equity fund or a strategic acquirer instead of the shareholders. But a “merge the companies” thesis is different, especially when there are such compelling synergies that create value for all shareholders. A transaction between players of this size would have to come primarily in the form of a stock-based combination, which would allow PFG and US Foods shareholders to participate in the long-term value creation that would arise from the merger.
We expect that an experienced activist like Sachem Head will be able to convince the board of this and a great outcome for shareholders would be a settlement to add two to three directors to the board along with the establishment of a new committee focused on evaluating strategic alternatives with at least one of the new directors on that committee. That could lead to a transaction that could be a windfall for everyone involved.
But if ultimately an evaluation is done and a standalone path is determined to be the best outcome, this remains a strong company and a high return on capital business with room to improve on costs and margins around the edges – areas which Sachem Head’s directors would also be valuable.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Performance Food Group is owned in the fund. More

ETF Strategist

ETF Street
ETF Strategist

ETFs brought in $540 billion in new money during the first half of 2025, which surpassed total inflows for the same period in 2024, according to Morningstar.
But “convenience can also breed complacency,” said certified financial planner Jon Ulin, managing principal of Ulin & Co. Wealth Management.
Many investors are vulnerable to big ETF mistakes, which threaten financial goals, experts say.

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Demand for exchange-traded funds continues to grow as investors seek lower-cost, tax-friendly options to meet their financial goals. But missteps can happen, experts say.   
ETFs brought in $540 billion in new money during the first half of 2025, which exceeded total inflows for the same period in 2024, according to Morningstar. Meanwhile, companies have launched 464 new ETFs through June, which could pass the 2024 record of more than 700.

“The rise of ETFs has been great for investors, but convenience can also breed complacency,” said certified financial planner Jon Ulin, managing principal of Ulin & Co. Wealth Management in Boca Raton, Florida.
“The biggest mistakes” aren’t about the products, but how investors use them, he said.

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Here’s a look at other stories offering insight on ETFs for investors.

Here are some pitfalls to know before pouring money into new ETFs, experts say. 

Investors should ‘look under the hood’

Some investors assume all ETFs are the same, without considering the underlying assets, according to Jared Gagne, a CFP with Claro Advisors in Boston. 
For example, some ETFs track broad indexes, like the S&P 500, while others, such as sector funds, invest in a specific industry or part of the economy, he said. Others could include thematic ETFs, focusing on themes or trends, or leveraged ETFs, with derivatives that amplify profits and losses.   

“If you don’t look under the hood, you may think you’re buying a diversified fund when in reality you’ve bought something extremely narrow and risky,” Gagne said.

‘Chasing performance’ can be costly

Like any investment, your ETF picks should match your risk tolerance, goals and timeline, experts say.
But a common mistake is “chasing performance” based on past returns, which may not continue, according to CFP Michael Lofley with HBKS Wealth Advisors in Stuart, Florida. He is also a certified public accountant.
Ulin said many investors “rush into buzzworthy ETFs” like bitcoin, cannabis or clean energy after seeing a rally. But “these funds can fall just as quickly as they rose,” he said.

You can ‘erode returns’ with frequent trading

One of the benefits of ETFs is the ability to buy and sell the assets throughout the day, similar to a stock. But some investors trade too often, Gagne said.
“The beauty of ETFs is low cost and tax efficiency, but investors often treat them like trading vehicles instead of long-term building blocks,” he said. “That behavior can quietly erode returns.” 
Over the past 10 years through 2024, investors in U.S. open-end funds and ETFs hurt returns by trading, according to a Morningstar report released in August.   
On average, these investors earned 7%, which was less than the funds’ 8.2% aggregate annual total return. That 1.2 percentage point “investor return gap” was due to poorly timed buying and selling, the report found. More

Due to lingering inflation and uncertainty around tariffs, consumers are concerned that holiday gifts will be more expensive this year, several reports show.
As a result, many shoppers plan to get a jump on the season.

Holiday decorations on display at a Costco in Princeton, N.J.
Jessica Dickler | CNBC

It’s barely the start of fall and yet, by some measures, the holiday season is in full swing.
Seasonal décor items — including pre-lit Christmas trees, wreaths, wrapping paper and a popular nativity set — are already on display at my local Costco, near Princeton, N.J., with some items even starting to sell out, according to sales associates.

Consumers began shopping for the holiday season as early as July this year, hoping to make the most of sales events such as Amazon Prime Day, said Brian McCarthy, a principal at Deloitte Consulting.
Nervousness about higher prices was a motivating factor, he said.
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Between lingering inflation and President Donald Trump’s tariff agenda, “consumers are more concerned about their economic outlook,” McCarthy said.
According to Deloitte’s recent holiday retail survey, retail sales will rise again this year, but at a slower pace compared to 2024.

Holiday shoppers are expected to spend $1.61 trillion to $1.62 trillion between November and January, up about 3% from last year, according to Deloitte’s report. The year before, holiday sales grew by 4.2%.
However, this year’s holiday sales will get an extra boost from e-commerce, which is projected to grow between 7% and 9% year-over-year during the 2025-26 holiday season, Deloitte’s survey also found.
“We expect this holiday season to demonstrate the resiliency of consumers as they continue to face economic uncertainty,” Natalie Martini, Deloitte’s vice chair and U.S. retail and consumer products leader, said in a statement.

Fears of higher prices over the holidays

Yet, heading into the holiday shopping season, 41% of consumers are concerned that gifts will be more expensive this year and 30% said they expect to spend less this holiday than they did last year, according to a separate report by Bankrate.
On average, consumers plan to spend about $1,552 on holiday gifts, travel and entertainment — a 5% drop from the planned holiday spending average in the year-ago period, according to another survey by consulting firm PwC.

Nearly half of shoppers, or 49%, have already begun or plan to begin shopping before Oct. 31, according to Bankrate’s survey, which polled more than 2,500 adults in July.
But for those who aren’t in the holiday spirit just yet, prices near the peak season may not be as high as previously thought.
“Retailers will have to offer discounts to get deal-conscious consumers to spend, and we should see the best deals roll out starting in early October and continue through Christmas,” said Ted Rossman, Bankrate’s senior industry analyst.

The impact of tariffs on holiday gifts

“The impact of tariffs for the upcoming holiday season is already baked in because for the most part, retailers have already acquired the items they are going to be putting on the shelves for the holiday season or they are already in transit,” said Marbue Brown, a consumer trends analyst and author of “Blueprint for Customer Obsession.” 

According to Deloitte’s McCarthy, many retail buyers placed their holiday orders earlier than usual this year, which can make it harder to manage inventory but helps guard against price shocks.
Tariff delays also “allowed a lot of retailers to get holiday merchandise in early at pre-tariff pricing,” Rossman said. As a result, “the holiday season could largely be insulated from tariff price hikes.”
At my local Costco in New Jersey, an artificial 7.5-foot, pre-lit Christmas tree is currently priced at $459.99, in line with last year. 
At least for now, “retailers are absorbing more of the hit than expected, although this might not last forever,” Rossman said.
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The Social Security cost-of-living adjustment may be 2.7% to 2.8% in 2026, according to new estimates based on government inflation data released Thursday.
If that increase goes into effect, it will add about $54 to the average retirement benefit.
Retirees worry that inflation and higher prices may surpass any increase to their monthly checks.

Customers shop for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas.
Brandon Bell | Getty Images

Millions of Social Security beneficiaries may see a 2.7% to 2.8% increase to their monthly checks in 2026, according to new estimates based on the latest government inflation data.
A 2.8% Social Security cost-of-living adjustment may go into effect next year, estimates Mary Johnson, an independent Social Security and Medicare policy analyst. That increase would push the average retirement benefit up by about $54.70 per month, she said.

Separately, the Senior Citizens League estimates the 2026 COLA may be 2.7%, pushing the average monthly retirement benefit up $54 per month, according to the nonpartisan senior group.
The average monthly retirement benefit is $1,955 for retired workers and their families, including spouses and children, according to August Social Security Administration data.
Those estimated increases would be up from the 2.5% boost to benefits that went into effect in 2025. The COLA has averaged 2.6% over the past 20 years, according to the Senior Citizens League.
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The COLA projections are based on new consumer price index data for the month of August that was released Thursday.

The official Social Security cost-of-living adjustment will include one more month of inflation data.
The COLA for the next year is typically announced by the Social Security Administration in October. It is calculated based on third-quarter data using a subset of the consumer price index, known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
There is a very high chance that the Social Security COLA will be 2.8% once September data is included, according to Johnson. In order for the COLA to land at 2.7%, there would have to be “virtually no inflation growth at all in September,” she said.

Retirees worry tariffs will hurt their buying power

While new estimates point to a higher COLA than this year’s 2.5% boost to benefits, the projections are lower than some increases Social Security beneficiaries have seen in recent years. That includes a 3.2% cost-of-living adjustment for 2024, as well as record-high increases Social Security beneficiaries saw in 2022 and 2023, when the annual COLAs were 5.9% and 8.7%, respectively.
Those record increases came as inflation jumped following the onset of the Covid pandemic.
Retirees worry a similar shock could prompt the rate of inflation to spike again.
Half of retirees surveyed say they are “terrified” about the potential impact tariffs may have on their retirement income or retirement savings, according to an August Nationwide Retirement Institute poll.
Around two-thirds of individuals who receive Social Security benefits think at least somewhat that tariffs will prompt inflation beyond what annual cost-of-living adjustments can cover, Nationwide found.

More than half of current Social Security beneficiaries in the survey said they have already had to reduce their discretionary spending as increases to their expenses have outpaced the growth of their benefits.
If a retiree sees a $54 cost-of-living increase to their monthly Social Security checks but other essential expenses like rent go up, the inflation adjustment doesn’t go as far, said Tina Ambrozy, head of strategic customer solutions at Nationwide.
Medicare costs are also poised to increase next year. The standard monthly Part B premium may go up $21.50 per month, to $206.50 per month from $185, according to Medicare trustees estimates. That would be “very close” to the highest premium jump in the program’s history, which was $21.60 per month in 2022, according to Johnson.
Medicare Part D premiums for prescription drug plans may increase by as much as $50 per month in 2026, Johnson said.

How higher inflation affects retirees

While the pace of inflation has come down from the 2021 and 2022 pandemic highs, seniors are still seeing higher prices on grocery store shelves and elsewhere.
Retirees are “particularly sensitive to inflation,” said Jean-Pierre Aubry, associate director of retirement plans and finance at the Center for Retirement Research at Boston College — though how it affects them individually depends on their personal circumstances.

For those who rely on fixed income investments like bonds, inflation can be “quite painful” if the returns and coupon payments do not keep pace with a rising cost of living, Aubry said.
However, for seniors who still have mortgage debt, inflation can help by making the real value of those outstanding balances go down, he said.
Notably, because Social Security cost-of-living adjustments are put into effect once a year, those increases may come after inflation has already risen.
If retirees can smooth out their spending by trying to avoid sharp ups and downs in their outlays, that lag can be less of an issue, Aubry said.
While 74% of respondents to Nationwide’s survey said they think they can manage Social Security benefits on their own, just one-third are confident in their knowledge of the program.
Working with a financial advisor can help retirees address those knowledge gaps and better manage their benefits and other assets, Ambrozy said.

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The consumer price index rose 2.9% on an annual basis in August 2025, the fastest pace of inflation since January.
Tariffs levied by President Donald Trump seem to be putting upward pressure on inflation for goods like clothing and furniture, economists said.
The Federal Reserve is expected to cut interest rates next week to help support a faltering job market. That risks keeping inflation elevated.

Shoppers browse shoes at a store in Los Angeles on Aug. 28, 2025.
Bloomberg | Bloomberg | Getty Images

Inflation picked up in August amid higher prices for staples like food and electricity, while tariffs put upward pressure on prices for physical goods like clothing and household furniture, economists said.
The consumer price index, a key inflation gauge, rose 2.9% in August from a year earlier, the Bureau of Labor Statistics reported Thursday.

That’s an increase from 2.7% in July and the fastest annual pace of inflation since January.
“Inflation is uncomfortably high and it’s accelerating,” said Mark Zandi, chief economist at Moody’s. “I think we should expect a further acceleration in inflation over the next six to 12 months.”

Tariffs contribute to rising goods prices, economists say

The CPI tracks how quickly prices rise or fall for a basket of consumer goods and services, from haircuts to coffee and concert tickets.
Inflation is reigniting largely due to reinflation for consumer goods, said Sarah House, senior economist at Wells Fargo Economics.
Prices for “core” commodities — which exclude food and energy — rose 1.5% in August from a year earlier, the fastest annual pace since May 2023.

Excluding the pandemic and its aftermath, core commodities haven’t risen that quickly since 2012.

Tariff policies pursued by President Donald Trump appear to be the main contributor to rising inflation for goods, she said.
U.S. entities that import goods from overseas pay the import duties. Companies will ultimately pass at least some of those additional taxes on to consumers, though the process will take many months due to various business strategies to try to blunt the impact, economists said.
“The fact that we’re seeing some of the largest tariffs since the 1940s I think is certainly a part of the pickup in goods prices,” House said.
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The tariff impact has been most noticeable in categories like household furnishings, appliances, apparel and recreational goods, economists said.
Apparel prices, for example, have risen by a relatively muted 0.2% over the past year, according to the CPI data. However, their annual inflation rate has jumped sharply in recent months, having climbed for three consecutive months from a recent low of -0.9% in May.
A large share of clothing imported to the U.S. comes from Asian nations where tariffs have risen considerably, Zandi said.
“Tariffs are all over the apparel prices,” Zandi said. “They’ve risen quite strongly the last few months.”

Trump invoked the International Emergency Economic Powers Act to impose many of his sweeping tariffs on trade partners. The Supreme Court will consider the legality of that maneuver during oral arguments in November.
Even if the Trump administration fails in court, there are alternative pathways it can pursue to keep many tariffs in place, economists said.

‘Sticker shock’ for some groceries

Physical goods aren’t the only contributor to rising inflation, however, economists said.
Grocery prices rose by 2.7% in August from a year earlier, up from 2.2% in July and their fastest annual pace since August 2023, according to the CPI data.
Tariffs may be playing a role for some foods, as with coffee (much of which is sourced from nations like Brazil and Vietnam, which have high tariff rates) and those for fruits and vegetables coming from Mexico, for example, Zandi said.

Beef, for example, has also caused “sticker shock” for consumers at the meat counter, due to short supply and steady demand, according to a recent report by the Wells Fargo Agri-Food Institute.
“Fruits and vegetables, which climbed the most since January 2020, and meats, poultry, fish, and eggs were the food products where prices rose the most,” Gargi Chaudhuri, chief investment and portfolio strategist for the Americas at BlackRock, wrote Thursday. “Many of these food products were affected by tariffs as the U.S. is a net food importer.”

Services inflation seems ‘stuck’

Meanwhile, disinflation among services has stalled, meaning services likely won’t offer much of a counterbalance against rising goods inflation, House said.
“It’s no longer slowing, is the near-term issue,” House said. “We’re going to be stuck here for a few months at least, we think.”
Electricity prices, for example, are up more than 6% since August 2024, according to CPI data.
That’s due largely to strong demand created by the “explosive growth” of data centers, which use ample electricity, Zandi said.

Travel prices have also picked up. Airline fares increased almost 6% from July to August (up from 4% the prior month), while lodging like hotels and motels rose almost 3%, according to the CPI data.
The pickup is likely due to consumer demand, House said. Consumers concerned about the economy and federal job cuts in the first half of the year pulled back on travel purchases out of caution, she said.
However, there are some downward inflationary pressures, too, economists said.

The labor market has cooled significantly, which puts downward pressure on wage growth as workers lose their bargaining power, for example, economists said. Businesses may therefore feel less need to increase prices for consumers if their labor costs aren’t rising quickly.
The Federal Reserve is expected to cut interest rates at its upcoming policy meeting next week to help prop up the faltering job market, but that risks keeping inflation elevated, economists said.
“They have no good choices here,” Zandi said. “The best course is to cut rates to keep the economy from falling apart, but risks inflation being more entrenched.”

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The U.S. Department of Education may soon start sharing information with students on “the benefits and risks” of borrowing for a college education.
Consumer advocates say the financial literacy effort could distract from the urgent issues facing millions of current borrowers.

The White House is seen in Washington, D.C.on September 09, 2025.
Yasin Ozturk | Anadolu | Getty Images

The U.S. Department of Education may soon begin sharing information with students and families on “the benefits and risks” of federal student loans, the Trump administration recently announced.
The department’s Office of the Ombudsman will take “a proactive approach to improve financial literacy,” according to a Sept. 5 press release, so that students “are better equipped to make careful borrowing decisions.”

The agency said its effort comes as outstanding federal student debt nears $1.7 trillion, and “loan defaults and delinquencies remain at record highs.”
Elaine Rubin, director of corporate communications at Edvisors, said that “addressing financial literacy and college costs in the process of financial aid is never a bad thing.”
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Historically, the Ombudsman’s office dealt primarily with complaints from student loan borrowers. However, it’s unclear what the fate of that work will be after the Education Department’s sweeping layoffs in March.
Experts say the staff cuts also raise questions about how the Trump administration will be able to launch this new borrowing education effort.

“The real question is whether there’s anybody left in the Ombudsman’s office to do any of this,” said higher education expert Mark Kantrowitz.

Effort amid high delinquency rates

The U.S. Department of Education headquarters is seen on March 06, 2025 in Washington, DC. 
Chip Somodevilla | Getty Images News | Getty Images

The Trump administration said more financial guidance is needed for borrowers amid the student loan portfolio’s “sobering statistics.”
More than 42 million Americans carry federal student loan debt. As of June, over 6 million borrowers were delinquent, and more than 5 million were in default, the Education Department said.
“By providing clearer guidance and support at the front end of the college journey, we believe students will make more informed decisions that lead to lower debt burdens, stronger repayment outcomes, and greater satisfaction with their educational investment,” said Undersecretary of Education Nicholas Kent, in a statement.

More pressing problems, consumer advocates say

Consumer advocates said the Education Department’s efforts could pull resources needed to address more pressing problems, including fixes for millions of borrowers who are unable to access affordable repayment options.
“By shifting focus to borrower education, it diverts attention from the urgent need to resolve consumer complaints and systemic servicing failures,” said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York.

As of the end of July, the Education Department had a backlog of more than 1.3 million applications from borrowers trying to get into an income-driven repayment, or IDR, plan, recent court documents show.
The pileup of applications is due, in part, to the end of President Joe Biden’s SAVE, or Saving on a Valuable Education, plan. That program was meant to significantly lower millions of borrowers’ bills but was met with Republican-led legal challenges and eventually repealed this summer in President Donald Trump’s “big beautiful bill.”
Many student loan borrowers now can’t afford the repayment plan options available to them, consumer advocates said. The monthly payments on SAVE were much lower than those offered under other plans, and recent legislation further narrows borrowers repayment choices.
“There is no amount of financial literacy that will solve the more than 1.3 million IDR application backlog or give answers to borrowers who have to wait on hold for several hours to find out the status of their loans,” said Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center.

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