This report, released as part of the SBPC’s broader work to investigate the consequences of COVID for student loan borrowers, reveals new evidence of the extent to which student loan servicers failed in the implementation of congressionally mandated borrower protections at the outbreak of the pandemic. These widespread errors caused even greater borrower harm than previously known. In particular, the findings of this investigation include tens of thousands of never-before-seen instances in which federal student loan servicers inaccurately told credit reporting agencies that borrowers, whose payments had been paused at the outset of COVID, had stopped paying on their student loans. This was in direct contravention to the CARES Act, which directed federal student loan servicers to report paused borrowers as being current on their loans, and also possibly violated federal and state consumer financial law such as the Fair Credit Reporting Act.
The findings of this report highlight the critical importance of robust, independent oversight of the student loan industry by federal and state law enforcement agencies and regulators.
Read the Blog: The Student Loan Industry Failed Borrowers During the Pandemic Even More than We Knew. The Biden Administration Must Act.