Center for American Progress

The Looming Student Loan Servicing Crisis

October 15, 2020

Yet after nearly half a decade of cancellations, restarts, mismanaged congressional relationships, expensive distractions, and a procurement process that appears to hand infinite veto power to companies that lose competitions, the entire system is at a precipice. The servicing arrangements that have been in place since 2009 will expire in little more than a year with nothing to take their place. Moreover, if the department’s latest attempt to head off catastrophe fails, it will be facing a massive rise in servicing costs—or even worse, the federal government may have no system in place to help 33 million borrowers navigate their loans.

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