The Stress of Student Debt
Friday, May 15th, 2015
Do you think there is a student loan debt crisis in the U.S.? No? What if we told you that 40 million borrowers owe $1.2 trillion in student debt and 8 million borrowers are in default on $110 billion of that debt?
Is inadequate student loan servicing contributing to the student loan default crisis? Student loan servicers are responsible for collecting payments from borrowers on behalf of loan holders. Student loan borrowers rely on servicers to process payments accurately , to provide statements and other billing information, and to answer inquiries about their accounts.
The Consumer Financial Protection Bureau (CFPB) announced this week that they are launching a broad review of student loan servicing. The CFPB wants to know if borrowers are being treated fairly and whether new rules governing servicing are needed. “As a growing share of student loan borrowers reach out to their servicers for help, the problems they encounter bear an uncanny resemblance to the situation where struggling homeowners reached out to their mortgage servicers before, during, and after the financial crisis,” said Richard Cordray, CFPB Director. Having seen the improper and unnecessary foreclosures experienced by many homeowners, the consumer bureau is concerned that inadequate servicing is also contributing to America’s growing student loan default problem.” (Source: Huffington Post)
Have you experienced problems trying to repay your student loan debt? Share your story with the Consumer Financial Protection Bureau.