In mid-May, the CFPB launched a public inquiry into student loan servicing practices that could “make paying back loans a stressful or harmful process for borrowers.”

According to the CFPB’s press release, consumers are experiencing problems associated with servicing transfers, payment posting, lost records, correcting errors, and a general lack of customer service. To address these concerns, the CFPB is seeking information from borrowers, lenders, loan servicers, and other interested parties on:

• Industry practices that create repayment challenges: whether billing error dispute processes harm consumers; whether financial institutions apply payments in a way that maximizes fees or increases the amount of interest paid; and if servicers provide the borrower enough information when transferring a loan.
• Hurdles for distressed borrowers: whether servicers’ policies and procedures result in borrowers paying more fees or prolonging repayment.
• Economic incentives that might affect the quality of service: whether student loan servicers have adequate economic incentives to enroll borrowers in flexible repayment options or help them avoid default.

The deadline for submitting comments is July 13, 2015 [Docket No. CFPB-2015-0021]. Visit consumerfinance.gov and regulations.gov.

The CFPB also has launched an enhanced version of its Repay Student Debt online tool, which helps borrowers figure out their options for affordable student loan repayment. Access the tool at consumerfinance.gov/paying-for-college/repay-student-debt.