WASHINGTON (Legal Newsline) — The Consumer Financial
Protection Bureau (CFPB) Student Loan Omsbudman has released a report about
consumer complaints of servicing problems that make it difficult to lower their
payments in relation to their income.
“Student loan servicers continue to fall short when it comes
to helping borrowers address $1.3 trillion in student debt,” said CFPB director
Richard Cordray. “It’s time servicers focus more effectively on processing
applications for income-driven repayment plans properly.”
Many student loan borrowers mentioned that they deal with
prolonged processing delays and wrongful rejections by servicers when trying to
take advantage of income-driven repayment plans. The delays can cause increased interest
charged and lost eligibility for certain financial protections. The CFPB is
releasing a “Fix It Form” so that servicers can improve their level of service.
"Student loan servicing breakdowns can stack thousands
of dollars of hidden costs on the backs of borrowers who can least afford
them,” said CFPB student loan ombudsman Seth Frotman.
Frotman stated that too many student loan borrowers do not
know how to pay for their loans based on their current income. He believes
servicers can use the report to take steps to mend what he believes is a broken