National Student Loan and Credit Report Debt Attorney

Student Loan Borrowers

Student Loan Policy – New Set of Guidelines

Rate this post

The Obama administration has recently proposed a new set of guidelines that would apply to direct federal student loan servicers. These guidelines seek to shift the focus of companies like Navient and Nelnet from a collections role to a counseling role intended to help guide borrowers down the path of paying off their student loan debt.

This shift in focus would come as a welcome change to anyone who has experience with the collection efforts of companies like Navient (formerly Sallie Mae) and Nelnet. Both organizations are notorious for robo-calling borrowers, harassing borrowers once they have them on the phone, and being unreasonable in their payment demands. The most frequent cause for complaints filed with the CFPB when it comes to student loans stem from interactions borrowers have with their loan servicers.

These new guidelines will come into existence through a number of directives being passed down from the Department of Education to the Federal Student Aid office. Through these directives, the shift in focus from a collections role to a counseling role is very evident. The directives include things such as: requiring services to inform delinquent borrowers of income-based repayment options before demanding payment, make legitimate attempts to contact borrowers at-risk of defaulting and counseling them about their repayment options, and ensuring that income-based repayment plan applications are processed in a reasonable time.

The goal of these new guidelines is to stem the surge of growing defaults before this trend has a larger effect on our national economy. Over the last three financial quarters more than 880,000 borrowers have defaulted on their Department of Education backed loans. Many are calling for a change in student loan policy to come before we see a financial crisis like occurred in 2008 with the housing market. With the housing market it took a financial collapse to get consumer protections put into place in the mortgage industry. Many would hope that it doesn’t take a similar collapse for student loans to get the reform they require.

While these new guidelines are a positive step in the right direction, they will only help those borrowers with federal student loans. If you are a borrower with private student loans, these guidelines and reforms will not apply to you. You will be at the mercy of your student loan servicer.

If you are having issues with your student loans, and particularly your private student loans we would love to hear from you. McCarthy law focuses on providing solutions to private student loan borrowers who are struggling to repay their debt. We can be reached at McCarthy Law PLC (855)-976-5777.

Summary
Relief for Student Loan Borrowers May be on the Way, But Not Soon Enough
Article Name
Relief for Student Loan Borrowers May be on the Way, But Not Soon Enough
Author
Publisher Name
McCarthy Law PLC
Student Loan Policy – New Set of Guidelines was last modified: October 27th, 2016 by Kevin Fallon McCarthy
The following two tabs change content below.
mm
Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.
mm

Latest posts by Kevin Fallon McCarthy (see all)

START NOW
Call 855-976-5777 or Chat Now
  • How much do you owe?
    Select your approximate debt.
    Less debt
    More debt
  • The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.