Dive Brief:
- The Consumer Financial Protection Bureau announced Thursday that it will expand its monitoring of student loan servicers.
- The Chronicle of Higher Education reports the watchdog agency will be on the lookout for servicers that make it harder for students to pay back their loans or create hurdles for students going into default.
- The agency will also investigate any “economic incentives” servicers have to provide sub-par service to students, according to the article.
Dive Insight:
President Barack Obama signed a Bill of Rights for student loan holders in March, asking the CFPB and other departments to take a closer look at laws protecting borrowers before recommending further changes. This seems to be the CFPB’s response as it begins to investigate the sector more deeply and identify problem areas. Director Richard Cordray has often compared the current situation with student loan defaults to the latest financial crisis, which began when mortgage borrowers defaulted on their debt en masse.