WASHINGTON, D.C. — Today the buyer Financial Protection Bureau (CFPB) education loan Ombudsman circulated a written report projecting that more than the following couple of years, one-in-three rehabilitated student loan borrowers could possibly be driven back in standard because of gaps between education loan programs. The report examines business collection agencies and servicing issues plaguing the federal programs created to greatly help an incredible number of defaulted education loan borrowers can get on track and into affordable payment plans. The Bureau estimates that the breakdowns across the course away from standard will price borrowers vast sums of bucks, including over $125 million in unneeded interest fees within the next couple of years. The Bureau is calling for an overhaul of the scheduled programs to be able to help to improve the healing process for troubled customers.
“The customer protections guaranteed under federal legislation should ensure it is very hard when it comes to most vulnerable consumers to be caught in standard, ” said CFPB Director Richard Cordray. “Today’s report demonstrates that far too many among these borrowers continue steadily to fall through the cracks of the problematic education loan system. “
“Too many education loan borrowers are now being left out because of breakdowns when you look at the federal programs built to offer them a new begin, including an inexpensive payment per month and a way to long-lasting success, ” said CFPB scholar Loan Ombudsman Seth Frotman. “This report provides further proof that industry practices and needless red tape can change a education loan into a intolerable burden. Policymakers should work to reform the programs being a deep failing those borrowers that need assist most. Continue reading