CFPB Projects that One-in-Three Rehabilitated Student Loan Borrowers Will Re-default Within Two Years

CFPB Projects that One-in-Three Rehabilitated Student Loan Borrowers Will Re-default Within Two Years

WASHINGTON, D.C. — Today the customer Financial Protection Bureau (CFPB) education loan Ombudsman circulated a report projecting that more than the second 2 yrs, one-in-three rehabilitated student loan borrowers might be driven back in default because of gaps between student loan programs. The report examines business collection agencies and servicing issues plaguing the federal programs created to aid scores of defaulted education loan borrowers can get on track and into affordable payment plans. The Bureau estimates that the breakdowns over the course away from standard will price borrowers vast sums of bucks, including over $125 million in unneeded interest costs on the next couple of years. The Bureau is calling for an overhaul among these programs to be able to assist in improving the healing up process for troubled consumers.

“The customer protections guaranteed under federal law should ensure it is extremely difficult for the many vulnerable customers to be caught in standard, ” said CFPB Director Richard Cordray. [Read more…]