Student Loan Servicers Get FCC’ed

It’s been a rough week for loan servicers, a bank, and even Bed Bath and Beyond when it comes to reaching out and touching someone. First, the FCC came down on student loan servicers, issuing a new rule limiting the number of calls that can be made to borrowers without the borrower’s permission. Cutting through the eyeball-numbing bureaucratese, a loophole in legislation last year allowed servicers and collectors acting to collect amounts owed to the federal government to robocall the debtor’s phones without penalty. The Department of Education and loan servicers put this loophole in the Telephone Consumer Protection Act(TCPA) as a benign public service to keep borrowers informed of their options for repayment. Consumer advocates and Senator Elizabeth Warren maintained that this would lead to a flood of robocalls eating up minutes and inconveniencing those who use pay as you go phones by using up their minutes, and also would open the door to harassment of borrowers.

As we say in legalese, “Well, duh!”

Sure enough, the dogs of war were loosed and havoc shortly ensued into class actions. In one case, Navient harassed a Florida pastor so much that she filed a million dollar lawsuit. There are similar stories wherever you care to look on the internet, with not only borrowers being harassed, but their family members and even complete strangers with the misfortune to have a targeted telephone number. The conduct of certain servicers has been noted to be abusive and misleading, and full of what are politely termed “materially inaccurate representations.”*

The new FCC ruling limits the circumstances under which these calls may be made and the number of calls that may be made per month.

1. The new rule applies to loans that are delinquent, or that are within thirty days of circumstances that will impact the timing of payments. This circumstance can be for a grace period, loan forbearance, a deferment, or a new payment arrangement.
2. Calls or texts are limited to three per month.
3. The servicer must inform the borrower that they have the right to request the calls stop. The servicer must honor that request if it is made.
4. Calls may only be made to the debtor or other person (such as a cosigner) or entity who is legally responsible for paying the debt.

As one might expect, the servicers were not particularly happy about any of this, claiming in the public comment period that skip-trace information was a vital tool in tracking down borrowers, and that it could take fifty calls to a given borrower to make contact. If these rules are violated, you have the right to file a complaint with the FCC against the servicer. Of course, Van Horn Law Group knows how to navigate Navient and other loan servicers when they cross the line, and we hope that you’ll take advantage of our free consultation services that can help you tame your student loans before Navient reaches out and touches your peace of mind.