On March 30, 2022, the Consumer Financial Protection Bureau (CFPB) issued a $1 million sanction on a student loan company. According to a press release by CFPB director Rohit Chopra, the company made deceptive statements to borrowers and misrepresentations regarding loan repayment and forgiveness options. The press release alleges that the company falsely told borrowers they were not eligible for loan forgiveness via the Public Service Loan Forgiveness (PSLF) program, a federal program that promises cancellation of Direct Loans. 

The CFPB’s Summer 2021 Supervisory Findings revealed that student loan servicers have misled borrowers about their loans’ PSLF eligibility. The press release reveals that the issuing of the $1 million sanction is one of many tactics the CFPB has employed to crack down on the deceptive practices of loan servicers. According to the press release, in February 2022, the CFPB issued a bulletin to loan servicers that recommends actions servicers should take to ensure they do not misrepresent borrower eligibility or make deceptive statements to borrowers about the PSLF program. The CFPB is also requiring the sanctioned loan servicer to contact all borrowers and provide them an opportunity to take advantage of the PSLF waiver to cancel their Direct Loans waiver before it ends in October.