STUDENT LOAN SERVICER FAILS
Student loan servicers cannot be trusted ever again. Even the replacement servicers are being fined by the Department of Education. They have set up an infectiously corrupt financial system that robs student borrowers constantly and in any way possible. They hold themselves out to be legal advisors to borrowers. They keep poor records to cover up the constant theft. They cover up for each other when they transfer files to each other. Lack of policing allows for their inaccurate financial records.
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student loan servicer fails
Podcast subjects: abuse; access; appeal; assistance; atrocious; avoid; bank fees; bankrupt; billing errors; bogus loan packages; breach of contract; call abandonment rates; capability; CFPB; class action lawsuits; competitive process; complaint; Complaint Department; Complexity; comprehensive review; conditions; Congress; consumer fraud; contemporaneous notes; control points; controversies; cost effectiveness; costs; credit report; customer service; debt relief; default; delay; delinquency; derelict; distress; efficiency; eliminate; Elizabeth Warren; employment certification; errors; escape; evaluation; expectations; experience; failures; false; Federal Student Aid; Final Rule; fines; focus; forgiveness; free pass; government funding; hardship; hearings broken; higher billing statements; IDR plan; incorrect; infrastructure; interest charges; irritate; jeopardize; lack of accountability; landscape; litigation; loan accounts; loan repayment plans; loan terms; long wait times; miscalculations; misleading; mismanagement; missing; mistakes; MOHELA; moratorium; nationwide; nauseating; Navient; nonsufficient funds; obstacles; Ombudsman Group; overdraft fees; oversight; pandemic; past performance; payment processing; payments; PLSF provider change; predatory lending; profiteers; program management; proposals; public service; purposeful; reform; refund; reimburse; relief; remove interest charges; renew enrollment; requirements; results based outcomes; SAVE plan; secret hearings; service performance; servicer selection; settlement; shareholders; shifts; sole provider; spreadsheet; strategies; struggle; systemic; teach grants; technology infrastructure; testify; threaten; tracking complaints; transfer; transparency; unacceptable errors; withhold payments to punish; workflow
Date | Title and URL | Summary | Keywords |
12/17/2024 More Servicer Illegal Practices | Student loan service providers face new allegations of illegal practices https://www.scrippsnews.com/life/money/student-loan-service-providers-face-new-allegations-of-illegal-practices | CFPB reported that servicers are misleading borrowers about protections and denying rightful benefits. The violations are in refinancing, private lending, debt collection and federal loan servicing. Private lenders pretend consolidation would not lose federal protections, like cancellation programs. Servicers misled about autopay discounts, payment suspensions during job loss, and due dates then pounced on the borrowers. Borrowers could not manage the debt by phone. Transcripts were ransomed if a loan defaulted. | enforcement action; investigation; remediate; second largest type of debt; submit complaints; violations |
December 2024 Servicer Refunds Take a Long Time | Report reveals issues with student loan servicing https://www.msn.com/en-us/money/other/report-reveals-issues-with-student-loan-servicing/vi-AA1us57P | CFPB’s 11/15/2024 report [located at https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-details-student-borrower-harms-from-servicing-failures-and-program-disruptions/] states that “Some student loan servicers were automatically taking money from borrowers’ bank accounts even when they didn’t consent to automatic payments. (Scripps News)”. Some were charged multiple times in a month, some were charged the wrong amount; all while waiting months and years for refunds. The CFPB report summarizes that analysis "of 18,000 borrower complaints reveals payment processing errors, inaccurate bills and repayment information, and unhelpful customer service”. | |
October 2024 More Servicer Punishment | Student loan servicer MOHELA faces new punishment from Biden administration https://www.msn.com/en-us/money/personalfinance/student-loan-servicer-mohela-faces-new-punishment-from-biden-administration/ar-AA1sojWY | Servicer MOHELA was fined for errors and failing to process applications. The Biden administration withheld $7.2 million from MOHELA and temporarily ceased new account assignments to the servicer. MOHELA must write a plan for correction for review. Servicers complain of difficulty accommodating the government. But a sixty-year-old is still waiting for refinancing under a different program after 6 months. Going back to school causes higher payments, erasing the benefits of prior loans. A court injunction helped cause servicer refinancing delays. So, forbearances were used to fix billing delays. Files weren’t transferred. Advocacy groups, Elizabeth Warren, and James Clyburn want MOHELA fired and audited. Republicans hold the Education Department responsible, concerned that MOHELA will lose money and not be able to issue state scholarships. | advocacy groups; American Federation of Teachers; assignment; audit; backlog; billing delays; blistering report; cease and desist letter; challenges; confusion; contractors as scapegoats; debt relief; delinquency; difficulty; dismayed; enforcement action; forgiveness in 20 or 25 years; income driven plans; incompetence; inspector general; less than satisfactory quality; litigation; monthly bill; new borrower accounts; payback; performance; plan; political points; poor job; pressure; profits; progress; quick action; ruthless loan forgiveness ; scale back; self-policing failure; Student Borrower Protection Center; stymie; surprised; tension; terminates |
9/16/2024 Who Gets the Navient Settlement Money, Besides the CFPB for Fines | Here's which Navient student loan borrowers may qualify for relief under $120 million settlement https://www.cnbc.com/2024/09/16/how-navient-student-loan-borrowers-can-qualify-for-120-million-settlement.html | The CFPB has not decided who in particular will receive the settlement money. An automated identification of eligible borrowers [don’t call us, we’ll send a check to you] approach has been selected. Navient used to be SallieMae [who aggressively pursued student loan profits and put employees in strategic government positions]. Public service loan forgiveness program inaccuracies and eligibility cover ups are also included in the accusations. Skirting income-driven repayment plans in favor of forbearances and deferments are included damage. | banned; clues; compensation; credit reports; eligibility; expensive; forbearance fees; forbearances; hundreds of thousands; inaccurate; late fees; Maximum Aidvantage; payment history denial; qualify; studentaid.gov; tarnishing; transfer; watch dog |
9/12/2024 SERVICER SETTLEMENT | Navient reaches $120 million settlement with CFPB for misleading student loan borrowers https://www.cnbc.com/2024/09/12/navient-reaches-120-million-settlement-with-cfpb-for-misleading-student-loan-borrowers.html | Navient, the largest servicer until quitting in 2021, reached a $120 million settlement with the Consumer Financial Protection Bureau (CFPB). The CFPB accused Navient of misleading borrowers, providing them with bad information, miscalculating payments, and tarnishing disabled borrowers’ (e.g., severely injured veterans) credit reports. The CFPB found Navient steered borrowers to forbearances, which triggered excessive interest charges for the profiteer. Navient may never again service federal student loans. Navient’s private loans were transferred to MOHELA [who has now been fined by the Education Department, a rarity]. | abuse; decade-old issues; exploitation; positive milestone; positive step; resolution; servicer; transformation |
9/13/2024 ABUSE RESOLUTIONS ARE TOO SLOW | Navient banned from federal student loan servicing, will pay borrowers $100 million in compensation. https://www.cbsnews.com/news/navient-banned-federal-student-loan-servicing-borrowers/ | The settlement took eight years after the CFPB investigated and then sued Navient. Navient advised borrowers to refinance under more costly repayment plans and not the “lower-cost income-based” financial products. Navient hurt the credit of severely injured disabled borrowers who had already discharged loans. | abuse; ban; barred; biggest servicer; borrowers across the country; closing the book; compensated; credit; disabled borrowers; exploitation; hundreds of thousands; legacy portfolios; loan servicing giant; mailing checks; mismanaged; one of the worst offenders; outsource; positive milestone; predatory lending; profited handsomely; scammers; settlement; steal; students; taxpayers; wind-down |