Student loan service under investigation for bias – fed watchdog

A federal watchdog is investing whether student-loan servicing companies engaged in discrimination against borrowers with outstanding debt based on their race, sex or gender, denying them affordable plans.

“We’re looking at disparities in outcomes… and we believe there may be some,” Patrice Alexander Ficklin, director of the office of fair lending at the Consumer Financial Protection Bureau, said on a call with reporters Friday, according to the Washington Post.

Ficklin said they had identified a student loan company servicing an area with “substantial risk of credit discrimination” but did not disclose how they reached that conclusion or disclose the name of the servicing company.

CFPB has jurisdiction over the largest servicing companies, including Navient, Great Lakes and American Education Services.

Last month, the CFPB reported a 429 percent increase in student loan complaints about providers from December through February compared with the previous year.

Consumers say lenders process payments incorrectly, make it harder for them to enroll in more affordable payment plans, and fail to act when borrowers complain.

The CFPB is already suing Navient – which services 12 million student loan borrowers and over $300 billion in federal and private student loans – for cheating borrowers by making them pay more for their loans than was necessary.

In the suit filed January 19, the CFPB claimed the company steered borrowers into payment options that made borrowers pay more for their loans and made the loan service more money.

Read More:

https://www.rt.com/usa/384803-federal-student-loan-investigation/