Wednesday, May 14, 2014
"Sallie Mae ordered to pay $96.6M for violating troops’ rights"
The DOJ is ordering the nation's largest loan servicer to pay restitution and penalties for "systematically violating the legal rights of U.S. service members." The title of this post comes from this Air Force News Service article, which explains:
A 2012 CFPB report found that service members faced serious hurdles in accessing their student loan benefits, including the provisions of the Servicemembers Civil Relief Act that cap the interest rate on pre-existing student loans and other consumer credit products at 6 percent while the service member is on active duty, CFPB officials said. Servicers were not providing them with clear and accurate information about their loan repayment options.
The CFPB heard from military borrowers, including those in combat zones, who were denied interest-rate protections because they failed to resubmit unnecessary paperwork. These kinds of obstacles prevent service members from taking advantage of the full range of protections they have earned through their service to this country, officials said.
The CFPB has partnered with the Defense Department to create better awareness of the rights and options for service member student loan borrowers. A CFPB guide for service members who have student loans contains clear information on the various ways student loans can be repaid.
Officials noted that the CFPB began accepting student loan complaints in March 2012, and added that service members who have an issue with their servicers should submit a complaint to the CFPB.