7 CONSUMER FINANCIAL PROTECTION BUREAU
Education, or SAVE) to lower monthly payments and interest accrual for many borrowers;
17
and
the “Fresh Start” program to temporarily waive some of the impacts of student loan default and
to provide borrowers with at least one defaulted federal loan with an easier path out of default.
18
In addition, certain servicers
19
exited the federal student loan program while ED ended its
contracts with private collection agencies (PCAs).
20
Servicers are responsible for accurately
implementing these changes, processing borrower payments and applications, and complying
with federal consumer financial laws.
Complaints reveal that borrowers are reaching out to servicers and encountering widespread
problems that prevent them from getting the information they need, enrolling in IDR plans, or
accessing loan cancellations.
21
Consumers reported experiencing long hold times, delays in
processing applications, and incorrect information regarding payment amounts and due dates.
Further, they reveal significant servicer errors including inaccurate payment histories and
delayed refunds that are owed to borrowers. The following sections discuss the consumer
complaints received by the CFPB during this period as they relate to those issues.
Service Loan Forgiveness Program, Will Put Over 550,000 Public Service Workers Closer to Loan Forgiveness,
(Oct. 6, 2021), https://www.ed.gov/news/press-r
eleases/us-department-education-announces-transformational-
changes-public-service-loan-forgiveness-program-will-put-over-550000-public-service-workers-closer-loan-
forgiveness; U.S. Department of Education, Office of Federal Student Aid, The Limited PSLF Waiver Opportunity
Ended on Oct. 31 2022, (accessed Oct. 5, 2023), https://studentaid.gov/announcements-events/pslf-limited-waiver.
17
88 Fed. Reg. 43820 (Jul. 10, 2023) (to be codified at 34 C.F.R. § 682, 685). 88 FR 43820. The final rule on the
SAVE Plan was published on July 10, 2023, and as such, represents a small portion of the period for this report.
18
U.S. Department of Education, Office of Federal Student Aid, A Fresh Start for Federal Student Loan Borrowers in
Default, (accessed Feb. 16, 2023), https://studentaid.gov/announcements-events/default-fre sh-start.
19
See, e.g., U.S. Department of Education, Office of Federal Student Aid, (LOANS-22-06) Public Service Loan
Forgiveness Program Transitioning from FedLoan Servicing to MOHELA (Updated Dec. 14, 2022), (Jun. 3, 2022),
https://fsapartners.ed.gov/k nowledge-c
enter/library/electronic-announcements/2022-06-03/public-service -loan-
forgiveness-p rogram-transi tioni ng-fedloan-servi cing-mohel a-updated-dec-14-2022.
20
Prior to the collections pause, administrative wage garnishments imposed on federally owned student loans were
administered by third-party private collection agencies (PCAs). However, on November 8, 2021, the Department of
Education announced that PCAs would no longer manage federal defaulted l oans.
Instead, management would b e
transferred to the Department of Education Default Resolution Group (DRG), indicating that the future default
recovery processes may differ in significant ways from the pre-2021 status quo. See U.S. Department of Education,
Office of Federal Student Aid, COVID-19 Relief: Loans in Default, (accessed Jan. 26, 2023),
https://studentaid.gov/announcements-events/covid-19/default
.
21
See Appendi x A for a more detailed analysis of the top issues raised in consumer complaints during this period.