The Consumer Financial Protection Bureau (CFPB) has finalized a proposed rule that will allow the agency to regularly examine the practices of the seven biggest student loan servicers to ensure they comply with federal consumer laws. Although the seven companies were not named, observers believe the U.S. Department of Education's four main student loan servicers -- Sallie Mae, Great Lakes Educational Loan Services, Nelnet Servicing, and the Pennsylvania Higher Education Assistance Agency -- are on the list.
Borrower advocates expect improved customer service and a more borrower-friendly culture at these servicers as a result. "Servicers now will be on notice that someone will be looking at what they're doing. The exercise of being examined and knowing examination guidelines exist will have an effect on the culture of servicers," says Center for Responsible Lending senior policy counsel Maura Dundon. "There's been a huge lack of transparency at the Education Department. The CFPB is a much more transparent and public-oriented agency."