The CFPB issued a report Friday identifying challenges faced by borrowers with federal student loan payments resuming after a three-year pause due to the COVID-19 pandemic.
The issue spotlight highlights:
- Long hold times and abandoned calls, as average call wait times to speak to a live representative have risen from 12 minutes in August 2023 to over 70 minutes in October 2023, according to the bureau;
- Significant delays in processing income-driven repayment plan applications, with servicers reporting more than 1.25 million pending income-driven repayment plan applications and more than 450,000 of those applications pending for more than 30 days with no resolution; and
- Inaccurate and untimely billing statements, including premature due dates before the end of the payment pause, inflating monthly payment amounts due to the servicer using outdated poverty guidelines, or using the incorrect income when calculating a borrower’s new income-driven repayment plan payment.
NCUA issued a letter to credit unions (23-CU-08) in October encouraging credit unions to work “constructively with impacted borrowers,” and noting NCUA “will not criticize a credit union’s efforts to provide prudent relief to borrowers when such efforts are conducted in a reasonable manner with proper controls and management oversight and consistent with consumer financial protection requirements.”