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Continued Scrutiny of Loan Servicers

April 27, 2017
 
 

The Consumer Financial Protection Bureau this week announced that its supervisory work has uncovered that some student loan servicers are violating the law by failing to provide struggling borrowers with legal protections.

The federal watchdog in January sued Navient, the largest student loan servicer, for allegedly creating obstacles for borrowers. In a new report, the CFPB said one or more servicers routinely acted on flawed information about borrowers and also failed to reverse wrongly imposed charges.

In addition, the agency said it has seen a recent increase in consumer complaints about student loans, with 3,284 complaints for the first three months of this, up from 773 during the same period last year. However, the agency said some of the increase is due to its move to begin accepting complaints about federal loan servicing in late February of last year -- meaning there was less time for consumers to file complaints during the first quarter of 2016. The CFPB also said its high-profile action on Navient could be a factor.

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