Student loan borrowers are regularly being denied their right under the law to make lower payments, according to the Consumer Financial Protection Bureau (CFPB), MarketWatch.com reported yesterday. CFPB examiners found that servicers, the private companies the federal government pays to manage the student loan repayment process, are regularly denying borrowers’ applications to enroll in plans that allow them to make payments according to their income, even though these borrowers qualify. Federal student loan borrowers have a right to these so-called income-driven repayment programs under the law, which cap a borrower’s student loan payment at a percentage of her income. Consumer advocates, the CFPB and others have accused servicers of not providing borrowers with the right or enough information to pick the payment plan that best suits their needs. The CFPB instructed one or more servicers to enroll borrowers who were improperly denied into income-driven plans and to enhance their policies for working with borrowers who submit incomplete applications as well as those that are approaching the deadline to recertify their income to stay on the plans. In addition, the CFPB directed these servicers to implement a program to oversee and verify the accuracy of decisions regarding borrowers’ applications for income-driven repayment plans.
