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How to Help your Clients Navigate Student Loan Servicers

Posted by Moira Do on 10/15/19 8:45 AM

 

Federal Student Loan Debt is a major issue that affects 43 million adult Americans. Many of them, like borrower Nicole Nelson, a native of Illinois, sought the advice of her loan servicer, Great Lakes Educational Loan Services. In a recent article by MarketWatch, the company allegedly deceived her by steering her towards repayment plans that benefit them, not her.

On June 2019, the federal appellate court unanimously decided that a loan servicer could not allegedly and deliberately misrepresent repayment options and use federal laws to shield the servicer from state rules barring deceptive business practices. The case highlights how the Education Department rarely holds servicers accountable. Due to these weak state consumer-protection laws in student-loan litigation, clients might end up with costly repayment options.

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Topics: Financial Advising, College Debt, Student Loan, Back to School

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