Report of the CFPB Education Loan Ombudsman
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) this report analyzes complaint data from September 1, 2020, through August 31, 2021, including COVID-19 complaint data, and notes an overall decrease in complaints that is likely attributable the CARES Act relief measures and subsequent administrative extensions through January 31, 2022.
The report notes that the pandemic has exacerbated socio-economic and racial disparities through the student loan and education ecosystems, and that gaps within these systems present heightened risk of borrower harm, particularly to vulnerable populations, and adversely affects student success. The report also notes that heighted risk of borrower harm may occur when CARES Act relief and administrative extensions expire on January 31, 2022, at which time, the return to repayment starts for over 32 million borrowers, the vast majority of whom have not made a payment in over 22 months. Further, four of nine federal student loan servicers have either stopped, or announced that they are will stop, servicing federal loans, and the resulting transfers (over 16 million borrowers) will have heighted risk of borrower harm.
Finally, this report provides Policymakers with recommendations regarding student success, the return to repayment, and servicing transfers.