Student Loan Bearers Beware: Suspicious Activity Regarding the Department of Education and Its Servicers
In May of this year, United States senators requested the Department of Education (DOE) to release reviews of student loan servicers’ compliance with the Servicemembers Civil Relief Act (SCRA). The Department’s results stated that less than 1% of cases were incorrectly denied the required SCRA interest rate cap.
This number seems pretty low considering the millions of people dealing with student loan debt. So, the senators decided to research deeper to see if the DOE reported accurate findings.
The results are shocking! After further investigation, the senators realized that the DOE was only reporting on a small fraction of relevant cases, and even within this small amount of cases, there were high error rates. They found that although the DOE claims an error rate of less than 1%, the error rate was nearly 30%!
In the cases where borrowers applied for relef, here is the error breakdown according to an analysis written by Senator Warren:
This raises serious issues. One is the DOE failed to assess, act on, or report any potential problems involving the student loan servicers, which questions their honesty and inadequacy. And two, despite these errors, the DOE keeps hiring the same companies to do business with. For example, Navient’s 100 million dollar contract was recently renewed by the DOE.
Although we applaud people who consolidate their student loans on their own, we want to make sure that everyone is aware of this troubling information and the many other hurdles along the way to consolidation.
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The original article published by Student Loan Borrower Assistance: http://www.studentloanborrowerassistance.org/senators-find-major-holes-in-the-department-of-educations-servicer-investigation/