This bill establishes stronger accountability standards for companies that service federal student loans on behalf of the Department of Education. Before awarding contracts to loan servicers, the Department must evaluate their past performance, customer satisfaction ratings, compliance history, legal actions against them, and ability to serve borrowers in multiple languages and support those at risk of default. Loan servicers must agree to specific contract requirements, including placing loans in interest-free forbearance when they make errors, providing credit toward loan forgiveness for periods affected by servicer mistakes, and correcting borrower credit reports when servicer errors cause negative marks. The bill also requires the Department to review existing loan servicing contracts within 180 days to ensure they meet these new standards, allows the Secretary to revoke contracts if servicers provide false information, and directs the Government Accountability Office to study how loan transfers between servicers create errors and harm borrowers. The new requirements apply to contracts signed 90 days after the bill's enactment, and the Secretary must report annually to Congress on compliance with the new standards.
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