The Consumer Financial Protection Bureau put student loan servicers on notice this week with a report detailing industry practices it found suspect.
These companies help collect on the $1.2 trillion in student debt, but the report didn't name names of shoddiest actors.
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The agency found that some companies would charge borrowers late fees on all their loans when payments for one fell short — even if the rest were paid in full.
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It spotted lots of other little tricks, too: minimum payments were overstated and late fees got charged even if borrowers made payments within a grace period. Servicers failed to provide information borrowers needed to deduct student loan payments from their taxes. They called borrowers 5,000 times at odd hours during the CFPB's 45-day examination period.
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In more serious cases, some borrowers who fell behind on payments were told they couldn't dismiss their student loans in bankruptcy even though there's a slim possibility in cases of "undue hardship".
The agency, born of the Dodd-Frank financial reform bill, said in a statement that firms with questionable practices are contacted for corrective measures. In particularly severe cases, it opens investigations.
