Archive

Go to:

October 2017
SMTWTFS
1234567
891011121314
15161718192021
22232425262728
293031
< Sep Nov >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

CFPB Finds Servicers Still Failing to Provide Legal Protections to Military Borrowers
Wednesday, July 8, 2015 6:50 AM

Yesterday, the Consumer Financial Protection Bureau released a report outlining the continued challenges faced by servicemembers when they contact student loan servicers to invoke the military rights and protections earned through their service.

The report, “Overseas & Underserved: Student Loan Servicing and the Cost to Our Men and Women in Uniform,” highlights servicers’ continued mistakes handling servicemembers’ student loan repayments, resulting in improper denials of legal benefits, negative credit reporting, and shoddy follow-through on legal protections for military families.

Complaints also include frustrations from grieving parents seeking to discharge a co-signed loan following the death of their child. “We continue to receive complaints from military student loan borrowers detailing a range of breakdowns and roadblocks,” said CFPB Director Richard Cordray. “Our deployed servicemembers should be able to focus on their military mission and spend precious free time talking with loved ones, not wrangling over problems with student loan servicers.”

Congress enacted laws and instituted programs to grant additional protections to servicemembers with student loan debt. For example, the Servicemembers Civil Relief Act (SCRA) includes an interest rate cap for men and women in uniform who acquired student loan debt before they went on active duty. And, among other protections, there are special loan deferment programs, Department of Defense Student Loan Repayment Programs, and loan forgiveness on certain federal loans for public service. In addition, some private student lenders advertise that they offer loan discharge, military deferment, and other protections for military families.

In 2012, the CFPB released the inaugural report, “The Next Front? Student Loan Servicing and the Cost to Our Men and Women in Uniform,” which emphasized complaints from military borrowers, including those in combat zones, who were wrongly denied interest-rate protections they were entitled to under the law. The CFPB has handled more than 1,300 complaints from military borrowers related to the servicing or collection of student loans since the publication of the last report.

Read the report here.

In an effort to educate military consumers and the advisors seeking to assist them, the CFPB has developed a guide for servicemembers with student loans with information on the various student loan repayment options. Frequently asked questions commonly posed by military student loan borrowers may be found at Ask CFPB.