Student Loan Servicing Complaints Rise

Here we go again. I sure hope that we prove Winston Churchill wrong this time by learning from history because if we do not then the potential outcome could be disasterous to all of us, maybe the repercussions could even go global. What is at stake is nothing short of the economic viability of the US economy and whether it could be dragged into another recession although it has not fully recovered yet from the close call of the previous one.

One of the major accomplishments of the previous Congress was the 2010 Dodd-Frank financial regulation bill which created, among other things, a student loan ombudsman at the Consumer Financial Protection Bureau, CFPB. This post is currently held by Rohit Chopra who issued a scathing report two days ago in which he warns of the "uncanny resemblance" between the mortgage problems that the economy witnessed 4 years ago and the current complaints by students about the way that their student loans are being serviced. Mr. Chopra has also asked Congress to consider passing a new set of regulations that will offer the students some more flexibility in modifying the conditions of their current student loans and in particular the the repayment arrangements. Many students have had to borrow large sums of money in order to attend institutions of higher learning with the hope that the increased earnings will allow them to pay back the obligations that they had undertaken. Obviously , in many cases, it has not worked out as planned. If we want to avoid another major financial debacle then we have no choice, as a nation, but to address this issue. The sooner the better.