Student loan service providers face new allegations of illegal practices [View all]
Source: Scripps News
Posted 3:42 PM, Dec 17, 2024
Student loan servicers are facing new allegations of illegal practices after the Consumer Financial Protection Bureau (CFPB) released a report Monday detailing a range of unlawful activities across student loan markets. The report highlights violations in refinancing, private lending, debt collection and federal loan servicing.
CFPB Director Rohit Chopra said, “Companies break the law when they mislead student borrowers about their protections or deny borrowers their rightful benefits.”
The bureau said consolidating loans through a private lender can end federal protections, but many providers misled lenders into thinking they would still have access to those benefits, like federal loan cancellation programs.
Lenders reportedly inaccurately claimed some borrowers were ineligible for autopay discounts or falsely advertised to borrowers that they could suspend their loan payments if they lost their jobs, then later took away those benefits, the CFPB stated.
Read more: https://www.scrippsnews.com/life/money/student-loan-service-providers-face-new-allegations-of-illegal-practices
Link to CFPB PRESS RELEASE - CFPB Uncovers Illegal Practices Across Student Loan Refinancing, Servicing, and Debt Collection
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