The head of the Consumer Financial Protection Bureau says many borrowers are struggling to get through to the companies that get paid to answer their questions.
Making matters worse, several of the largest servicers ended their contracts during the pandemic, forcing a tidal wave of borrowers and their records onto other servicers.In normal times, the handful of companies that service federal student loans have to help a few million borrowers a year move into repayment. But, right now, they need to help 39 to 40 million — and do it with less money than usual.
Buchanan says these cuts are putting them in an impossible position. Just imagine, he says, in your job, whatever it is you do, being told, your workload is about to increase exponentially,"then your boss comes in and says, 'Oh, we fired four people because we don't have the money to pay for them.' And then says, 'but keep up the same level of service.' That's going to be a problem for any business.
And right now, it's a problem for borrowers too, which is why Rohit Chopra, at the watchdog CFPB, has this warning for servicers:By that, he means giving borrowers incomplete or inaccurate information, even if it's. Chopra says, too often right now, the call center workers who do pick up the phone to answer borrower questions are brand new and don't understand the system.
"I think when it comes to telling borrowers the truth, or making sure they're adhering to all the consumer protection laws we have on the books at the federal and state level, you know, not getting paid enough is not going to be an excuse," Chopra says."You can beat us up if you want to, but it's not actually going to solve the issue. Everyone needs to agree: We want better service. We want people to have quicker access to agents on the phone.
Until that happens, Buchanan says, servicers will do the best they can, while Rohit Chopra warns, that may not be nearly good enough.
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