On Tuesday, January 26th the National Council of Higher Education Resources (NCHER), the Education Finance Council (EFC), and the Student Loan Servicing Alliance (SLSA) filed an ex parte letter with the Federal Communications Commission (FCC) offering background details on federal student loans and the importance of including pre-default servicing in the Notice of Proposed Rulemaking (NPRM) under development by the Bureau of Consumer and Governmental Affairs. The FCC is expected to release the NPRM in early- to mid-February in order to meet the timeline included in the Bipartisan Budget Act, which amended the Telephone Consumer Protection Act (TCPA) to allow the use of auto-dialer technology in the collection of federally-held and guaranteed debt. A copy of the letter can be found here.
In the letter, NCHER, EFC, and SLSA state that the organizations view the recent changes included in the Bipartisan Budget Act of 2015 as an opportunity to assist federal student loan borrowers avoid delinquency and default, rehabilitate defaulted loans, and access discharge programs for which they are eligible. They note that distressed borrowers do not actively seek out assistance. Without being contacted and provided with timely and accurate information regarding their rights and responsibilities, many borrowers will continue to struggle to avoid default. The organizations go on to say that it takes a sustained effort over a period of time to successfully contact a delinquent or defaulted borrower in order to collect on a student loan and explain repayment options. As the FCC moves forward and develops its NPRM, NCHER, EFC, and SLSA urged the Commission to adopt rules that permit reasonable and responsible calls to wireless telephones to assist student loan borrowers.
NCHER president James Bergeron commented: “Over the last few months, NCHER has had conversations with the Federal Communications Commission (FCC) where we have provided background on the student loan industry, the unique array of options available to student and parent borrowers to help them pay back their loans, and the importance of including pre-default servicing – and not just debt collection – in the upcoming rule making process. The letter from NCHER, EFC, and SLSA reiterates these points, and is intended to illustrate why the responsible use of technology is critically important in helping borrowers repay their debt and avoid or get out of default.”
In November of this year, insideARM wrote extensively about the inclusion of the auto-dialer provision in the Bipartisan Budget Act. See our November 5, 2015 story.
It will be very interesting to review the NPRM and subsequent activity. Industry experts are worried that, in light of the FCC Rulemaking in July of 2015, the FCC will craft very narrow rules for the student loan collection industry. One such person commented: “Based on the commission’s current attitude toward auto-dialer technology, it would not surprise me to see a one-call limit to an individual’s cell phone.”
Kudos to NCHER, EFC, and SLSA for their proactive steps to educate the FCC on the many positives reasons why the technology is necessary and why it is a positive, not a negative for the consumer.