This story appeared in Bank Digest.
A roadmap for student loan servicing reform, including a call to establish clear and consistent industry-wide standards, has been issued by the Consumer Financial Protection Bureau, the Treasury Department, and the Department of Education in a Joint Statement of Principles on Student Loan Servicing and a CFPB report outlining widespread servicing failures reported by student loan borrowers. The CFPB said that it intends to explore potential industry-wide rules to increase borrower protections. The regulators agreed to align efforts to strengthen protections for student loan borrowers and seek to ensure that student loan servicing is consistent, accurate and actionable, accountable, and transparent. The CFPB drew upon these four general principles in formulating recommendations for student loan servicing reform in its report.
In May, the CFPB launched a public inquiry into student loan servicing practices that may make paying back loans a stressful or harmful process for borrowers. The CFPB also sought input on potential solutions to improve service for student loan borrowers in repayment. The CFPB report considered over 30,000 public comments in analyzing student loan servicing practices, policies, and procedures.