Conduent Education Services pays $3.9M for student loan servicing violations
Fine Amount:
$3.9 million
Penalty Type:
Issued by:
The CFPB has issued a consent order to Conduent Education Services, LLC (CES), a student loan servicing company that formerly operated under the name of ACS Education Services. CES is in the process of winding down its business.
The Bureau found that CES engaged in unfair practices that violated the Consumer Financial Protection Act of 2010 by failing to adjust in a timely manner principal balances of student loans made under the Federal Family Education Loan Program. CES did not make required adjustments to account for circumstances such as deferment, forbearance or the borrowers’ entrance into an Income-Based Repayment program. Loans that required adjustments were placed into queues, and such adjustments were not made, in some cases, for years. As a result, some borrowers paid off loans with inaccurate balances, and some borrowers were unable to consolidate their loans while they waited, sometimes for months, for CES to adjust their principal balances.
Among other things, the consent order requires that CES, if it has not already done so, make proper adjustments to the principal balances of the relevant loans or otherwise make restitution to borrowers or any third parties who paid off such loans. The order also requires CES to pay a $3.9 million fine.
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