CONGRESSIONAL UPDATES AND NEWS
Committee Chairs Request Student Loan Servicing Documents from CFPB
Three House of Representatives committee chairs requested records from the Consumer Financial Protection Bureau (CFPB) on its efforts to protect students from unlawful loan servicing practices. In a letter to CFPB Director Kathy Kraninger, the three chairs—House Financial Services Committee Chairwoman Maxine Waters (D-CA), House Education and Labor Committee Chair Bobby Scott (D-VA), and House Oversight and Reform Committee Chair Elijah Cummings (D-MD)—expressed concern over the Student Loan Ombudsman position, which had remained vacant for a year following the resignation of Seth Frotman. The Trump Administration recently named Robert Cameron, a former student loan servicer executive, the new Student Loan Ombudsman. The letter also listed concerns with the CFPB’s failure to issue annual reports on student loan complaints, moves to consolidate student protection offices, and pushes to encourage struggling borrowers to enter forbearance rather than income-driven plans. The committee chairs requested the CFPB provide internal communications regarding these topics by September 9.
In addition, the committee chairs sent a letter to Secretary of Education Betsy DeVos, criticizing the Department of Education (ED) for its failure to conduct oversight of student loan servicers and it’s undermining of state and local law enforcement and CFPB authority to protect borrowers. The committee chairs requested additional documents be provided by ED and federally-contracted loan servicers Navient, Nelnet, and Pennsylvania Higher Education Assistance Agency (PHEAA), though it is unclear if the documents were provided by last week’s deadline.
Legislative Bills of Note
H.R.4193 (Rep. Shalala, D-FL) - Student Loan Disclosure Transparency Act of 2019 This bill would amend the Higher Education Act to require monthly updates to borrowers regarding their projected payments, accrued interest, total cost of attendance, and other details in understandable terms. It aims to make the loan process more transparent to students, many of whom are first-time borrowers.