CFPB Spotlights Complaints About Public Service Loan Forgiveness
Tue 27 Jun, 2017 / by McIntyre & Lemon / Client Alerts
06/27/17 – The Consumer Financial Protection Bureau (CFPB) has issued a report highlighting complaints from borrowers about student loan servicers mishandling Public Service Loan Forgiveness.
The Public Service Loan Forgiveness program, launched in 2007, is meant to encourage people to enter public service despite increasing levels of student loan debt. The CFPB estimates that 25 percent of the U.S. workforce is employed in some form of public service, and many may be eligible for loan forgiveness under this program.
The Public Service Loan Forgiveness program provides people in public service jobs with a path to debt forgiveness after 10 years, with the first borrowers eligible in October 2017. Borrowers report that servicers delay or deny access to loan forgiveness through wrong information about their loans, flawed payment processing, and bungled job certifications.
The report highlights complaints about servicing problems that may knock borrowers off track as they seek loan forgiveness earned through their public service and guaranteed by federal law. The report analyzes complaints from March 1, 2016 through Feb. 28, 2017. Borrower complaints include:
- Incorrect or insufficient information from servicers about loan forgiveness eligibility;
- Processing delays and errors that cause borrowers to miss out on qualified payments; and
- Job certification problems that knock borrowers off track.
The CFPB also issued updated guidelines to prioritize oversight of servicers’ administration of the Public Service Loan Forgiveness program. Also, the Bureau is launching the “Certify Your Service” campaign to help public servants stay on track for federal loan forgiveness.