b'Student LendingIn 2021, Goodwin tracked 9 federal and stateof consumers prepare to resume federal student-loan enforcement actions related to student lending,repayment in May 2022, [w]e are at a critical moment representing a slight increase from the seven actionswhen so many borrowers are going to have to restart Goodwin tracked in 2020. Though 2021 saw antheir payments, and the CFPB intends to ensure that increase in the number of enforcement actions, thethe restart is happening lawfully so we can avoid an amounts recovered were much lower than in recentavalanche of defaults when any moratorium might end. years, as state and federal enforcement agenciesIn response, in part, to this anticipated increased scrutiny obtained only $54.6 million in redress and penaltiesby the CFPB (and others), several of the largest student compared to $368.1 million in 2020 and $986.9 millionloan servicers have elected to exit the federal student in 2019. The decrease in recoveries was driven by thelending market, and it would not be surprising if other fact that 2021 lacked large individual actions like theservicers follow suit. Two of those servicers (Granite $100+ million settlements with three different studentState and the Pennsylvania Higher Education Assistance loan providers in 2019, or the $330 million settlementAgency (PHEAA)) announced that they will not renew with ITT Educational Services in 2020. A majority oftheir federal contracts. In explaining its departure, the this years actions were brought by states, namelyPHEAA announced that [i]n the 12 years since PHEAA California and Massachusetts, whereas the remainingaccepted the terms of its federal servicing contract, actions were brought by various federal agenciesthe federal loan programs, as managed by the U.S. including the CFPB, FTC, and DOJ. Looking ahead toDepartment of Education, have grown increasingly 2022 and beyond, we anticipate an eventual increasecomplex and challenging while the cost to service in both state and federal scrutiny, especially in light ofthose programs increased dramatically. Subsequently, the massive federal student repayment currently setthe nations largest servicer of federal student loans to occur in May 2022 (or sometime soon thereafter)(Navient) announced that it has elected to transfer the and the recent appointments to CFPB leadershipsentirety of its federal contract and student loan portfolio experience and interest in the student lending space. to a new party (Maximus). The result of these changes is that 16 million borrowers and a loan volume of over $650 Key Trends billion will be transitioning to new servicers beginning in February 2022. Although President Bidens recent Although student lending has been an area of interestextension of the federal student loan forbearance period for enforcement agencies at both the state and federalfrom February 1, 2022 to May 1, 2022 will provide these level in recent years, including under the Trumpnew servicers a little more breathing room, the proximity administration, lenders should expect even greaterof the servicing transfers and return-to-payment scrutiny under the new CFPB Director Rohit Chopra.promises to pose challenges.Under the Obama administration, Chopra served as theThe upcoming return-to-payment and disruption in the CFPBs first Education Loan Ombudsman and helpedstudent lending market led the CFPB Education Loan establish the Student Aid Bill of Rights. More recentlyOmbudsman to state in its October 2021 annual report during Director Chopras March 2021 CFPB Directorthat the CFPB anticipates the upcoming return of 32 confirmation hearing, he stated that [t]he CFPB has a bigmillion borrowers to federal loan repaymentthe largest role to play in working with the Department of Education,entry into repayment in the history of higher education State Attorneys general and overseeing how servicers will lead to an unprecedent challenges. Nevertheless, [are] communicating, and making sure that borrowers canthe CFPB expects servicers to be prepared for this navigate their options. Director Chopra further signaledtransition and prevent consumer harm, claiming that that the CFPB will be more active in student lending[t]he potential issues and challenges that may cause space. Director Chopra acknowledged that, as millions 44'