What We Have to Say About the CFPB’s Findings on Loan Servicing Failures
The Consumer Financial Protection Bureau, or CFPB, issued a new report revealing widespread servicing failures reported by student loan borrowers who have either federal loans, private loans, or both. According to the CFPB, consumers describe companies using a wide range of sloppy, patchwork practices that can create obstacles to repayment, raise costs, cause distress, and contribute to driving struggling borrowers to default. In conjunction with the report, the U.S. Treasury, the Department of Education, and the CFPB also announced a Joint Statement of Principles on Student Loan Servicing.
Read what we and our partners have to say about it.
Center for American Progress Senior Director of Postsecondary Education:
For too long student loan servicing has been the Wild West for borrowers, with little hope of consistency, accuracy, or accountability. The joint principles on student loan servicing announced today are a good first step, but the CFPB should move quickly to write rules that ensure student borrowers are protected from shoddy servicing practices.
Center for American Progress Senior Fellow Rohit Chopra:
A wrongful student loan default can devastate a young person’s financial future, making it harder to land a job or one day buy a home. When student loan servicers slip up and cut corners to protect their profits, this isn’t just bad for borrowers, it’s bad for all of us.
For more information or to speak with a CAP expert, contact Allison Preiss at firstname.lastname@example.org or 202.478.6331.
Generation Progress Policy Director Sarah Audelo:
Today’s CFPB report underscores the magnitude of the student debt crisis and the disastrous performance too many borrowers face from their loan servicers—something we’ve heard time and again in work with borrowers from across the country. The inadequate practices that servicers have gotten away with for too long must come to an end, and we’re glad to see the CFPB looking at the issue of student loan servicing. We would encourage the CFPB to quickly put in place rules that hold accountable servicers that are bad actors and increase borrower protections.
For more information or to speak with an expert, contact Layla Zaidane at email@example.com or 202.481.8245.
Posted on 30 September 2015