Wednesday, April 26, 2017
Consumer Financial Protection Bureau may monitor Student Loan Servicers more closely (Michael Simkovic)
Kathleen Engel (Suffolk), Jonathan Glater (U.C. Irvine), and 13 more legal scholars and economists who study higher education and consumer finance have submitted a comment letter supporting a recent proposal by the Consumer Financial Protection Bureau to monitor student loan servicers more closely. The scholars have also suggested that anonymized versions of the resulting data should be shared with researchers who can help analyze it.
Although the federal government originates and holds most student loans, it contracts with non-profits, state agencies, and private lenders to service those loans--that is, to interact with borrowers, send statements, and collect payments. The scholars expressed concerns that some servicers might not be adequately informing borrowers of the various repayment plans available to them, and could thereby be driving up defaults or financing costs for borrowers.