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Issue Spotlight: Federal Student Loan Return to Repayment

As monthly payments for federally owned student loans come due for the first time in over three years, the Consumer Financial Protection Bureau (CFPB) is actively engaged in oversight of this return to repayment. We are supervising student loan servicers, monitoring consumer complaints, and collaborating with federal and state partners to ensure that servicers are held accountable when they fail to meet their legal obligations to borrowers during this critical period.

The Consumer Financial Protection Act directs the CFPB to conduct risk-based supervision that considers the dangers to consumers created by the provision of consumer financial products or services and focuses resources toward areas with greater risk. The CFPB determined that the return to repayment of federally owned student loans presents significant consumer risks and initiated its supervisory response due to the number of impacted consumers (over 28 million), consumer complaints and other field market intelligence, and the history of compliance issues by student loan servicers.

The CFPB is releasing the following aggregate anonymized observations of the return to repayment because of the extent of the risk of harm to consumers during this period as well as the significance of the ongoing issues examiners have identified to-date. The CFPB notes that these issues may have serious implications for borrowers as well as for servicers’ compliance with state and federal consumer financial protection law.

Full Report

Read the full report.