Student loan servicers are facing new allegations of illegal practices after the Consumer Financial Protection Bureau (CFPB) released a report Monday detailing a range of unlawful activities across student loan markets.
The report highlights violations in refinancing, private lending, debt collection and federal loan servicing.
CFPB Director Rohit Chopra said, “Companies break the law when they mislead student borrowers about their protections or deny borrowers their rightful benefits.”
The bureau said consolidating loans through a private lender can end federal protections, but many providers misled lenders into thinking they would still have access to those benefits, like federal loan cancellation programs.
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