Congressman Cleaver Calls on Student Loan Companies to End Predatory Loan Practices
(Washington, D.C.) – Congressman Emanuel Cleaver, II (D-MO) and Congresswoman Pramila Jayapal (D-WA) sent letters to the CEO’s of the four largest student loan servicers - Navient, Nelnet, Great Lakes and FedLoan Servicing - urging them to address consumercomplaints about inadequate servicing, poor record-keeping, and steering borrowers into costly repayment plans.
“We write to you with deep concern over the rising rate of student loan defaults and continuous claims of fraudulent practices in lending, servicing, and collecting,” the letter states.
Student loan debt has grown to over $1.3 trillion in the United States with nearly 5 million Americans currently in default as mentioned in this Wall Street Journal report.
Persis Yu is an attorney and the Director of National Consumer Law Center’s Student Loan Borrower Assistance Project.
"Servicers can play a critical role in helping student loan borrowers keep their loans manageable and affordable. Unfortunately, as we saw in the Consumer Financial Protection Bureau’s lawsuit against Navient, bad servicing can be very costly for borrowers, and can even cause borrowers to default on their loans. We applaud Representative Cleaver’s efforts to ensure that servicers working for the federal taxpayer are operating in the best interest of student loan borrowers," said Director Yu.
Cleaver and Jayapal are requesting that the student loan companies:
• Implement an aggressive campaign to retrain staff on repayment plans and other available plans
• Implement an escalated customer support pilot program to service high risk borrowers and borrowers who have rehabilitated loans
• Commit to working with an independent third party to review their student borrower accounts and identify those who are delinquent and at high risk for default. Work with these borrowe
• Implement call center business hours that can service borrowers coast to coast. Currently west coast borrowers are having issues reaching east coast servicers to receive timely support. Congressman Cleaver has been aggressively seeking solutions to combat the overwhelming burdens of student loans. He held a town hall in his district in Kansas City, Missouri last summer specifically geared to the topic of student loan debt. Congressman Cleaver also called on the U.S. Government Accountability Office (GAO) to investigate the Department of Education’s student loan services and industry practices.
“This is an issue that needs immediate remediation. There are too many people in the U.S. who are struggling and if we can lessen the burden with these student loans, we can help people breathe a little easier,” said Congressman Cleaver.
Emanuel Cleaver, II is the U.S. Representative for Missouri’s Fifth Congressional District, which includes Kansas City, Independence, Lee’s Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee, the Ranking Member of the Subcommittee on Housing and Insurance, and also a Senior Whip of the Democratic Caucus. For more information, please contact Heather Frierson at 816-842-4545 or Heather.Frierson@mail.house.gov.