- On Thursday, the Consumer Financial Protection Bureau proposed a rule that would allow it to ensure large, non-bank student-loan servicers are complying with federal consumer protection laws.
- If the rule is adopted, non-bank student-loan servicers handling over 1 million accounts would fall under the federal agency's oversight, and the bureau estimates the seven largest student-loan servicers (handling a total of about 49 million borrowers) would be affected.
- The bureau currently only monitors student loan servicing at banks, and the proposed rule comes as the bureau has received complaints from some borrowers that they often face confusion, inefficient communication and "runarounds" when dealing with their student-loan servicers.
From the article:
... "The decision to take out loans may be the first major financial decision for some students," Mr. Cordray said. "We don't want to see degrees become more of a burden than a blessing."
But it's not only the process of dealing with loan servicers that confuses borrowers. The rising number of businesses that service student loans, from one company in 2008 to 13 as of last September, and a lack of consistency in how they operate have exacerbated the confusion. ...