I attended a program this morning entitled “All I Need to Know I Learned from the Government: A Look at the Regulatory and Enforcement Landscape for Student Lending .” Among the panelists was Rohit Chopra. Rohit serves as an Assistant Director at the CFPB where he leads an office that focuses on issues facing students and young Americans. In 2011, He was also designated by the Secretary of the Treasury as the Student Loan Ombudsman within the CFPB. Rohit discussed a wide range of student lending and servicing issues of concern to the CFPB. He expressed dismay at the lack of data and transparency associated in this area which results in students and co-signers making poor choices. He chastised the industry for failing to provide loan modification options which he indicated should not be available and offered just to borrowers in default since very often co- signers are keeping loans current.
Mr. Chopra also identified servicer payment processing as a significant problem. In particular, he said that servicers often fail to follow the borrower’s instructions on how to apply the proceeds of a refinancing of a student loan on situations where the servicer is servicing multiple loans for such borrower.