On September 29, 2015, the CFPB released a report outlining perceived failures in servicing of both private and federal student loans. Some of the issues identified in the report include: servicers not disclosing alternative repayment programs; servicing transfers resulting in processing problems, such as surprise fees and lost repayment benefits; customer service representatives not resolving servicer’s errors; issues processing payments made by borrowers; and issues affecting borrower segments, such as older borrowers and military families. The news release notes that taking action against illegal student loan servicing practices remains a CFPB priority and that it is working to address the problems outlined in the report.
The CFPB, Department of Education, and Department of Treasury also released a Joint Statement of Principles for student loan servicing. The Principles state that the Bureau and the Departments will work towards: providing a clear set of minimum requirements for student loan servicers; requiring servicers to provide accurate information regarding their loan and repayment options to borrowers; holding servicers accountable for violation of federal or state laws; and encouraging private servicers to disclose information related to loan performance. The CFPB has advocated the Principles as a roadmap to reform of the student loan servicing industry.