Government seeks closer oversight of student loan firms
The government's consumer finance watchdog wants stricter oversight of companies that collect and log student loan payments.
The Consumer Financial Protection Bureau says that it wants the authority to supervise the activities of student loan companies that aren't banks. It says the scrutiny is needed because the market is growing rapidly and more people are falling behind on their payments.
Student loan servicers have so far escaped routine oversight by government regulators. Borrowers complain that the companies lose paperwork, fail to apply payments and provide poor customer service.
The bureau already supervises student loan collections by big banks.
The proposal is open for public comment for the next 60 days.