CFPB projects that 1-in-3 rehabilitated student loan borrowers will re-default within 2 years

Earlier this week, the Consumer Financial Protection Bureau Student Loan Ombudsman released a report projecting that "over the next two years, one-in-three rehabilitated student loan borrowers could be driven back into default due to gaps between student loan programs. The report examines debt collection and servicing problems plaguing the federal programs designed to help millions of defaulted student loan borrowers get on track and into affordable repayment plans. The Bureau estimates that the breakdowns along the path out of default will cost borrowers hundreds of millions of dollars, including over $125 million in unnecessary interest charges over the next two years. The Bureau is calling for an overhaul of these programs in order to help improve the recovery process for distressed consumers." The press release, with a link to the Ombudsman's report, is here.

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