The Consumer Financial Protection Bureau (CFPB) is seeing cases in which student loan servicers are withdrawing incorrect amounts from borrowers’ bank accounts and making other errors involving payments.
The agency often receives consumer complaints saying that servicers pulled the wrong amount from an account, withdrew money multiple times during a month, did so even if the borrower had not consented to automatic payment, and took months to deliver refunds after being notified of their errors, CNBC reported Tuesday (Nov. 19).
“Unfortunately, autopay errors were one of the most widespread, basic and consequential servicer errors we saw this year,” CFPB Student Loan Ombudsman Julia Barnard said in the report. “These errors are incredibly costly and completely unacceptable.”
The CFPB said in a Friday (Nov. 15) press release that it received more than 18,000 complaints from student loan borrowers between July 1, 2023, and June 30, 2024 — the highest number since the regulator began collecting such complaints in March 2012.
While announcing this and other findings from its Annual Report of the CFPB Student Loan Ombudsman, the agency said it is urging legislators and other policymakers to make reforms that it said would improve student loan servicing.
“As the federal loan system undergoes rapid changes, it is crucial that servicers immediately address these persistent issues,” Barnard said in the release. “Policymakers should ensure that student borrowers can access the loan cancellation and lower monthly payments they are entitled to and implement new accountability measures to fix these long-standing problems.”
The CFPB has taken several actions related to student loans in 2024, including barring Ejudicate from arbitrating disputes about student loans and other consumer financial products, filing an order to ban Navient from directly servicing or acquiring most loans under the Federal Family Education Loan Program, and filing a student loan-related complaint against the National Collegiate Student Loan Trusts and Pennsylvania Higher Education Assistance Agency.
On Wednesday (Nov. 13), the CFPB reported that 63% of student loan borrowers have difficulty making their student loan payments and that 37% have missed at least one payment.
The CFPB also found in its 2023-2024 Student Loan Borrower Survey that many of these borrowers don’t know they could choose a different repayment plan that could help lower their payments.
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