Published: July 2015

Loan servicing standards need to improve for students and families

Coalition: Americans for Financail Reform (AFR)

In response to the Consumer Financial Protection Bureau’s (CFPB) request for information, consumer advocates brought to light issues commonly found within the student loan servicing industry. Wide-spread problems relating to miscommunication, payment processing errors, dispute resolution and servicer transfers are a few areas the advocates asked the CFPB to address.

Improving student loan servicing standards is a critical component of helping student borrowers’ successfully repay their loans. The current servicing system makes it difficult for borrowers to understand their repayment options, the way in which their payments are processed and who currently owns their debts. The misinformation that runs rampant in the servicing industry makes borrowers frustrated, stressed and ultimately, leaves them without hope. The confusion around repayment makes borrowers prime targets for student loan scams. As students increasingly rely on borrowing to pay for college, the student loan servicing industry must remove the substandard practices that make it harder for borrowers to pay down their debt.

Lead Organization

Americans for Financial Reform (AFR)

Other Organizations

AFL-CIO | American Association of State Colleges and Universities Americans for Financial Reform | Center for Responsible Lending | Consumer Action | Consumer Federation of America | Consumers Union | Higher Ed Not Debt | Jobs With Justice | The Leadership Conference on Civil and Human Rights National Association of Consumer Advocates | National Community Reinvestment Coalition | National Consumer Law Center (on behalf of its low-income clients) | National Council of La Raza | National Education Association | National Fair Housing Alliance | National | People's Action | National Urban League | Project Springboard | Public Citizen | Service Employees International Union (SEIU) | Student Labor Action Project | The Other 98% | TICAS | U.S. Public Interest Research Group | United States Student Association | Veteran Education Success | Young Invincibles

More Information

For more information, please visit AFR's website.

Download PDF

Loan servicing standards need to improve for students and families   (Student-Lending-Servicing-Letter-Final-7.13.151.pdf)

 
 

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