CFPB Asks Borrowers for Information about Student Loan Servicing–Deadline is July 13

This is a great opportunity for borrowers to be heard, but you must submit your comments by July 13.  You can send them electronically, by email or regular mail.

• Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.
• Email: FederalRegisterComments@cfpb.gov. Include Docket No. CFPB-2015-0021 in the subject line of the message.
• Mail: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552.
• Hand Delivery/Courier: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1275 First Street NE., Washington, DC 20002.

This is an example of just one of many comments submitted by consumers so far:

“I took out my first federal student loan in 1994 to attend the University of my dreams. Since then I have earned over $10,000 in student loan debt. I knew I would have to pay it back, but I thought I was paying it back to the bank. I did not know that my loans would be handed over to the company Sallie Mae. Since being out of school, I have worked part-time, full-time, and have been out of work. During those times I always made payments on my loans. After making payments for 10 years, I still owe over $8,000 in student loan debt. The interest rate on my loan makes it nearly impossible to catch up and see my balance go down. The last time I looked at my repayment calculator, it stated I wouldn’t have my loans paid off until 2022. That is the year my son will be graduating from high school and preparing to attend college. Last year there was a shake up in the student loan borrower world, Sallie Mae was handing some loans over to Navient. I knew this was happening about two months before the final transfer. Literally the week before this transfer was to be official, SallieMae contacted me stating that I owed them a payment. Not only had I already made a payment for that month, I was attending school and carrying 6 units for the semester. My loans had been in deferment until all of a sudden SallieMae said they weren’t. I contacted SallieMae and they told me that my school failed to report me as attending. I contacted my school and they said it was SallieMae’s error. While trying to get that cleared my loan transferred to Navient, and SallieMae had nothing else to say. Approximately two months after my loan being moved to Navient and making two payments, I receive a letter from a company called Nelnet. This letter informs me that they now have my student loan and to send payments to them. I checked their FaceBook page and I was not the only person that thought it was a scam. Now my loans have changed hands for a fourth time, and I had no say in any of it. Nelnet sent me a notice in April 2015 stating that I was no longer in school and owed them a payment. Keep in mind I have been making payments the whole time I have been in school. I contacted them to tell them I am carrying 6 units for the Spring semester. Again, I have the company telling me that my school reported I was not attending. I have not defaulted on my loans. I have always made my payments, even when my loans are in deferment. Twice I have had the companies tell me I am not in school when I am. Once I had tried to get a temporary disability deferment, and was told I could not because I had taken my loan out after 1994. I was unable to work, how could I pay my loan off? The most devastating part to a student loan, isn’t just paying it back. The interest rate on student loans are far to high. After ten years of payments my loan balance would be at least $2,000 less what it is, if my interest rate mirrored my credit card interest rate. The interest rates for student loans needs to change and be lowered. Another thing that needs to happen is to make sure those going into school know about the companies that take over their loans when they leave school. I was never given that information.”

We also want to affirm our support for the CFPB’s efforts to protect student loan borrowers.  In particular, we honor and support the commitment of the CFPB’s “student loan watchdog” Rohit Chopra who announced this week that he is leaving his post.

In an earlier post, we noted a  Wall Street Journal  article highlighting the work of Mr. Chopra and the CFPB.  Apparently, according to the article, Mr. Chopra’s work did not always “sit well with the industry.”  We noted that “this is a good sign for borrowers that the CFPB is doing its job to make consumer financial products and services work for Americans.  As we have written in prior posts, the CFPB exists largely because the lending industry (including many current private student lenders) engaged in widespread predatory practices that buried many consumers in debt.  These lenders now do everything they can to  change the conversation.  They talk about these loans from the past as ancient history.  Sometimes they make excuses and move on.  The problem is that they left so much destruction along the way.  It is not ancient history for our clients and others like them with ruined credit histories and shattered dreams.  The companies must not be allowed to move on without doing their part to help troubled borrowers.”

Mr. Chopra and others at CFPB have repeatedly warned that without proper regulation, student lenders could repeat past mistakes.   CFPB staff have repeatedly raised the need to provide relief for borrowers.  Perhaps this is why, the Wall Street Journal quoted  Richard Hunt, president of the Consumers Bankers Association, saying that there is more tension between banks and those in the CFPB’s student lending division than in all other areas of the CFPB combined.  Well done Mr. Chopra.  We expect to hear your voice again in the future to help bring fairness to the consumer marketplace and to consumers.