Well, student loan borrower woes, Attributable to student
loan servicers, is more accurate.
Gretchen Morgenson, within the N. Y. Times,
who did great work since the mortgage crisis,
discovers similarities between student loan servicers
and mortgage servicers.
Hmmm.? Something I blogged on here a while back.
This quote from her education loan servicer story encapsulates what is wrong with the loan servicing business:
\”Good loan servicing is costly,\” Maura Dundon, senior policy counsel in the center for Responsible Lending, said from a recent interview. \”It requires reaching out and talking to people, and servicers avoid them because they don\’t get compensated for that. Here is the fault of servicers, but it\’s and also the fault of the Department of Education for not writing this into their contracts.\”
In accessory the same old “we lost/did not get the paperwork, you have to send it again,” they ignore requests for particular payment plans and just pick that makes the servicer more income.
Perhaps the biggest problem cited by borrowers as well as their advocates was the failure of student loan servicers to advise their customers with the full array of repayment plans there when needed. In many cases, this means borrowers have no idea they are eligible for loan relief , nor receive it.
Of course, first, the us govenment made it complicated so many people need the options explained.
Different student loan repayment programs depend on what job you\’ve got, when you took out the loan, if you are in default, what type of student loan or loans you could have, and, your income.
Which leads to:
But many eligible borrowers don\’t read about these options, advocates say. An August report in the Government Accountability Office estimated that 51 percent of student loan borrowers nationwide are eligible for income-based repayment plans, but only 15 percent are enrolled.
As with mortgages:
It took a couple of month to fix the problem, Mr. Wittwer said. \”You should be hypervigilant about it because student loans are constantly being sold and moved.\”
The government pays these clowns $600 million annually to “service” student loans.
The new gorilla on the market, the CFPB, is whacking some wrists.
The Consumer Financial Protection Bureau is dealing with rules to standardize student loan servicing practices. In the meantime, its enforcement unit has education loan servicing companies under the microscope. It brought a situation against Discover Bank last summer, saying it inflated the amounts it said borrowers owed on his or her loans.
Discover Bank paid $18.5 million without admitting or denying wrongdoing.
No one in America is wrong anymore.