Bureau acts after thousands of complaints regarding bungled school loan reduction applications
CFPB has thrown a warning flag on student lenders and student loan servicers, charging that many requests for relief under a special federal program have not been handled properly. Yet, as one high-ranking community bank niche student loan refinancer explains, there’s two sides to the workability—and potential results—of the relief setup.
Education loans are the second-largest consumer debt market in the U.S., accounting for nearly $1.3 trillion held by about 43 million Americans. CFPB estimates that one in four of those borrowers is either in default or struggling to pay.
How federal relief works
Relief is available through Income-Driven Repayment (IDR) plans that adjust the repayment rate according to the borrower’s income and family size....