The cost of education in the United States continues to outpace inflation, and outstanding
student loan debt has grown to over $1.5 trillion, up over 600% since 2009. Student
loan debt is currently the second-largest source of consumer debt in the country behind
mortgages. Approximately 15% of student loan borrowers were in serious delinquency (90-plus days delinquent or in default) at the end of 2017, which is higher than the percentage of mortgage debt delinquency during the financial crisis.
As the industry grows, the Department of Education’s Office of Financial Student Aid announced plans for the Next Generation (NextGen) Financial Services Environment at the end of 2017. As a result of the increased outstanding student loan debt and related delinquency rates, as well as surging consumer complaints, regulators have sought to expand guidelines. In conjunction with the rollout of the NextGen servicing platform, the enhanced guidelines are intended to improve the servicing of student loans.
What challenges loom for student loan servicers and how should servicers re-examine processes and compliance frameworks to stay ahead? Read on to see how servicers can assist delinquent borrowers, improve performance scores, and grow the servicing portfolio as well as reduce regulatory risk.
Additional contributor: Savannah Xiao
2018 was a turbulent year for the student lending industry with a series of high impact changes. As the industry landscape continues to transform, we foresee more disruption in 2019. Lenders and servicers that are able to embrace the challenges and opportunities will have a distinct advantage in this market.”
Kathryn Rock, Director