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CFPB Seeks Information on Student Loan Servicing Issues

Tuesday, July 14, 2015

The Consumer Financial Protection Bureau issued a Request for Information (RFI) soliciting feedback on student loan servicing issues. CRL submitted comments to this request for information – comment author Maura Dundon offered the following remarks on student loan servicing issues:

Fair student loan servicing is critical to protect borrowers and help them repay their loans successfully.

But student loan servicing stands today where mortgage servicing stood over a decade ago: critically important and largely ignored. We have seen that the handling of student loans is rife with problems; some student loan servicers have been known, like mortgage servicers before them, to engage in deceptive practices, flout contractual obligations, evade borrower requests, and apply the loan terms in a way that benefit the servicer – not the borrower or investor.

Instead of supporting higher education, the present student loan servicing system can make it more difficult for borrowers to realize the promise of their investment. As American students increasingly rely on loans to pay for college, the student loan servicing system will impact more and more people and families. Reforms, like the reforms to the mortgage servicing system, can resolve bad practices and ensure proper protections for borrowers.

Comments to the Request for Information were due on July 13, 2015.

To speak with Maura Dundon or to further discuss student loan servicing, please contact Catherine An at catherine.an@responsiblelending.org or 202-349-1878.