PostsecData Members Applaud Proposed Student Loan Servicing CollectionPublished Apr 25, 2017
Twelve members of the Postsecondary Data Collaborative (PostsecData) co-signed a letter that applauds the Consumer Financial Protection Bureau’s (CFPB) proposed Student Loan Servicing Market Monitoring initiative. The initiative will collect information from both private and federal student loan servicers on their loan portfolios and borrower repayment outcomes, including plan type and status. The PostsecData letter outlines how the proposed initiative will identify barriers to successful loan repayment and improve outcomes for all student loan borrowers, especially those at greatest risk of delinquency and default.
The Student Loan Servicing Market Monitoring Initiative will provide valuable information in four key areas:
- Private and federal student loan outcomes. By disaggregating each repayment plan type for completers and non-completers by servicer this initiative will produce data that enable comparisons of how various servicing agencies serve borrowers most at risk for delinquency and default, while also helping to identify borrowers’ barriers to repayment.
- Barriers to enrollment in Income Driven Repayment (IDR) plans. The initiative will provide a comprehensive look at borrowers who have submitted applications to enroll in IDR or recertify their income. The collection will measure approval time from the date the borrower first applied for IDR and will reveal whether each application is “in-process” or incomplete. This data collection will include the number of days required to approve the application, the number of incomplete recertification applications, and the number of applications abandoned prior to submission.
- Deferments and forbearance. The initiative will gather information on the number of borrowers in deferment or forbearance, supporting efforts to prevent borrowers from remaining in one of these non-payment statuses unnecessarily for extended periods of time.
- Servicer support for borrowers. The initiative will include data on both borrower repayment status, like how many students or dollars are in delinquency or default, and consumer assistance, tracking how struggling borrowers are doing and what servicers have done to aid them. For example, the initiative will collect information on communications initiated by both borrowers and servicers, and will track borrower account activity, including submitted payments, repayment plan enrollment changes, recertification of income for IDR, and loan status changes. or.
The Student Loan Servicing Market Monitoring initiative takes important steps to track borrower outcomes and will provide valuable information in improving the student loan system for borrowers. The initiative especially helps low-income students, who are most likely to borrow, as well as students with low incomes after college, who are most likely to face challenges with loan repayment. This proposal is one critical step toward addressing the student debt troubles that plague many Americans. Furthermore, these data will provide servicers with information to help them improve their practices, and ultimately improve repayment outcomes for the borrowers whom they serve.
View the PDF to read the letter.