New Protections for Student Loan Borrowers

What protections do student loan borrowers have to ensure that their loans will be serviced properly and that they will not become victims of debt collection scams? According to a recent news release from the U.S. Department of Education (DOE), the DOE has partnered with the U.S. Department of the Treasury and the Consumer Financial Protection Bureau (CFPB) to take action to “better support the more than 40 million Americans with federal student loans.” The recently announced further actions is supposed to build upon the 2015 Joint Statement of Principles on Student Loan Servicing, which called for “consistency in student loan servicing practices.”
New Initiative for Student Loan Data on Credit Reports
When the DOE made the announcement about its further plans to take action to protect student loan borrowers, it announced a “new initiative to modernize the way student loans appear on borrowers’ credit reports.” In addition, the DOE plans to develop new loan-servicing objectives that will help with the Department’s plan to create “a new state-of-the-art loan servicing system.” With a new system, the DOE hopes to “improve student loan servicing practices, promote borrowers’ successful loan repayment, and reduce borrower defaults.”
Given that there are many different options for federal student loan repayment—many of which are not known or are not clear to borrowers—the DOE also wants to make repayment options clearer for students. As such, it is also developing a new webpage that will help to personalize the student loan repayment experience for individual borrowers. According to the news release, it will “better inform student loan borrowers about repayment options best-suited to their unique circumstances.” Representatives from the Department emphasize that an investment in higher education remains extremely important for young students, and the DOE wants borrowers to know they have options and support for repaying what they owe.
New Credit Reporting System
Why is it important for the DOE to take steps to modernize the way in which student loan debt appears on credit reports? For many students, borrowing federal loans is one of the first ways they begin establishing credit. As such, student loans tend to be an important part of a student’s credit history, and thus it is extremely important for loans to be repaid on time. However, timely repayment is not necessarily reflected consistently on credit reports.
With the CFPB and the U.S. Department of the Treasury, the U.S. Department of Education is working alongside credit reporting industry parties “to update and develop guidance to ensure that credit reporting for student loans fairly, consistently, and accurately reflects repayment activity.” The agencies recognize that consumers with student loan debt rely on accurate credit reporting related to their repayment activity.
Contact an Oak Park Consumer Protection Attorney
Millions of Americans are dealing with both federal and private student loan debt, and many cannot afford to make their loan payments. In some cases, you may be able to discharge student loan debt by filing for bankruptcy. If you have questions about managing your student loan debt or about holding a loan servicer liable for fraud or harassment, a dedicated Oak Park consumer protection lawyer can assist you. Contact the Emerson Law Firm today for more information about how we can help.

See Related Blog Posts:

Comments

Post a Comment

Popular posts from this blog

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more