Student loan borrowers know all too well how tough it can be to get information or resolve issues with servicers that manage their loans after they leave school. Turns out, the Treasury Department is listening.
In a speech
given last week at the annual National Consumer Law Center conference, Deputy Treasury Secretary Sarah Bloom Raskin expressed her ongoing concern that student loan borrowers are struggling to repay their loans in part because of the troubling practices of loan servicers
. She cited missing paperwork, failure to help borrowers access affordable payment plans, and surprise fees as common problems – which are both troubling and all too familiar, she said, because mortgage servicers did a lot of the same things before the housing meltdown.
Although she expressed hope that the Department of Education’s recently modified servicing contracts will get better results by rewarding servicers extra to keep borrowers current, her message at the end was clear: the federal government as a whole must “continue close scrutiny” of these issues, and improve the system through “appropriate enforcement action” that holds servicers accountable for how they treat borrowers.
We couldn’t agree more. In fact, when the Department of Education held a public hearing on November 4, we spoke out and called on them to clear up the mess with student loan servicing. You can check out our full comments here
We’ll keep making the case that students and families need a fairer shot – now! Stay tuned in the coming months for more developments….
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