Student Loans

Subscribe to Student Loans via RSS

*Daniel Pearson is not admitted to practice law in the District of Columbia. He is practicing under the supervision of firm principals.

On March 15, 2018, the State of Washington enacted Senate Bill 6029 (“SB 6029”), titled the “Washington Student Education Loan Bill of Rights,” which takes effect June 7, 2018, and amends the state’s Consumer Loan Act (the “CLA”) to expand its scope to include student loan servicers. Whereas the CLA currently regulates and licenses consumer lenders (both mortgage and non-mortgage), and mortgage servicers, when SB 6029 takes effect the CLA will also regulate and license student loan servicers. As a license is needed under the CLA to make any student loans to residents of Washington, it seems reasonable that if state legislators believed student loan servicers should be licensed in Washington, the CLA should be amended to provide for such licensing rather than enact a new and separate licensing law.¹

With that legislation, Washington becomes the latest state to license student loan servicers, joining California, Connecticut, the District of Columbia, and Illinois.²
Continue Reading Washington Licenses Student Loan Servicers*

On June 22, 2017, the CFPB’s Student Loan Ombudsman put out its annual report on student loans, as required by the Dodd-Frank Act. The report analyzes complaints submitted by consumers about student loan servicers between March 2016 and February 2017. Many of the complaints relate to practices, such as payment processing, customer service and borrower communication, and income-based repayment plan enrollment, that the CFPB has frequently scrutinized in the past through supervision and enforcement activities.

However, the majority of the report focuses on complaints from consumers related to the Public Service Loan Forgiveness (PSLF) program, which allows those who enter careers in public service to have their student loans forgiven after a decade. The CFPB’s report criticizes servicers’ alleged failures to actively advise borrowers on how to qualify for PSLF, track their progress toward PSLF completion, and inform them about the requirements of the PSLF program. In conjunction with the report, the CFPB updated its education loan examination procedures to include additional questions about the PSLF program.
Continue Reading CFPB Issues Report on Student Loan Servicing and Updated Examination Procedures

The Consumer Financial Protection Bureau (CFPB) marks its fifth birthday having made a substantial mark on the consumer financial services marketplace. To mark this event, we have compiled a retrospective of the CFPB’s first five years. The retrospective provides an overview of the CFPB’s actions in the realms of rulemaking, supervision, and enforcement. While it …

Concept-Hammer_Piggy_Bank_66904617

On May 13, The First Marblehead Corporation became the latest in a series of student loan servicers to disclose possible forthcoming enforcement action by the Consumer Financial Protection Bureau (CFPB). While CFPB investigations are generally non-public, First Marblehead’s disclosure and those of other companies that preceded it suggest that the CFPB’s Office of Enforcement has focused on student loan servicing and collection investigations and now has a pipeline of cases close to resolution.  The series of disclosures suggests that 2016 may see as many as four separate enforcement actions focused on student loan servicing.
Continue Reading When Will the Hammer Fall? The Pipeline of CFPB Student Loan Servicing Enforcement Cases is About to Burst

Student Loan

The Consumer Financial Protection Bureau (“CFPB”) took another step in addressing concerns about student loan servicing.  Recently, the CFPB released a set of proposed disclosures, dubbed the “Payback Playbook,” intended to provide borrowers with clear information about their repayment options, particularly if they are facing financial distress.  The CFPB is helping develop the…