On January 5, 2017, the Consumer Financial Protection Bureau (CFPB) released a report that examines complaints from older student loan borrowers about student loan servicing practices.
According to the CFPB, student loans “make up the nation’s second largest consumer debt market, and seniors are the fastest growing segment of this market.” Approximately 2.8 million Americans over the age of 60 have a student loan and the average loan amount is $23,500.
According to the CFPB’s report, older student loan borrowers have reported the following student loan servicing issues:
- Servicers failing to advise consumers that they may have their loan payments adjusted under an income driven plan when their income changes;
- Improperly applying co-signer payments to other loans the primary borrower has with the creditor;
- Failing to provide consumers with access to loan information in a timely fashion; and
- Threatening to offset private student loan debt with consumer’s federal benefits, such as Social Security.
As discussed in previous posts, the CFPB has repeatedly warned about student lending issues and has taken action against various student loan participants. By releasing its latest report, the CFPB hopes that it will urge policymakers to consider the issues raised in the report and takes steps to remedy them.
Bottom line: The CFPB continues to focus on student lending issues; thus, if you are a student loan lender, servicer, or debt collector you should pay close attention to the CFPB’s warnings.