Education loans : Report Reveals Issues with Private Student Loan Servicers

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Education loans
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Report Reveals Issues with Private Student Loan
Servicers
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• Earlier this year, the Consumer Financial
  Protection Bureau (CFPB) issued its report,
  "Private Student Loans," highlighting a number of
  issues with regard to private student loans, and
  concluding that federal student loans are the
  better choice for the vast majority of borrowers.
  
• And we continue to agree, especially in light of
  the CFPB's Student Loan Ombudsman's more recently
  issued "Annual Report," which highlights issues
  faced by borrowers when dealing with servicers of
  private loans.

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• The report was based on complaints received by
  the CFPB, submissions of stories through the
  CFPB's website, town halls and discussions with
  borrowers, and comments submitted by the public
  and by organizations that receive complaints
  about student loans.
• The majority (65 percent) of issues reported fell
  into the "Repaying your loan" category, which
  includes "fees, billing, deferment, forbearance,
  fraud, and credit reporting," with the most
  common being "the difficulty negotiating a
  repayment plan with their servicer in periods of
  unemployment, underemployment, or financial
  hardship."

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• There were also a number of issues highlighted as
  "Servicing Surprises.
• " Notably, borrowers who may be seeking to
  restructure other debt through bankruptcy so
  they'll able to pay student loans (since student
  loans generally can't be discharged through
  bankruptcy) found the filing actually triggered
  the default on their student loans they were
  trying to avoid.
• And, in what the CFPB described as "Unexpected
  checking account transactions," when a borrower
  had a checking account with the same company that
  handled their loan, the lender would, without
  notice or agreement, deduct funds from their
  checking account.

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• Certainly, servicing issues aren't limited to
  private student loans. Last month, seven
  Republican lawmakers requested the Government
  Accountability Office to issue a detailed report
  on federal Education loans servicing.
• But the Student Loan Ranger hopes there can be a
  more detailed investigation of private student
  loan servicing.
• Addressing these issues and finding relief for
  these borrowers is especially crucial because the
  lack of protections means servicing issues on the
  private side can be much more impactful.
• Source http//bit.ly/1RgorGJ

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