Student Loan Servicing Practices

1. A student loan servicer may not use unfair, deceptive, or unconscionable means in servicing any student loan. Without limiting the general application of the foregoing, the following conduct is a violation of 209 CMR 18.42: (a) directly or indirectly employing any scheme, device, or artifice to defraud or mislead student loan borrowers; (b) engaging in any unfair, deceptive, or unconscionable practice toward any person or misrepresenting or omitting any material information in connection with the servicing of a student loan including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a student loan, the terms and conditions of the loan agreement or the student loan borrower's obligations under the student loan; (c) obtaining property by fraud or misrepresentation; (d) knowingly or recklessly misapplying loan payments to the outstanding balance of a loan; (e) making any false statement or knowingly and willfully make any omission of a material fact in connection with any information or reports filed with a governmental agency or in connection with any investigation conducted by the Commissioner or another governmental agency; (f) allocating partial payments in a way that maximizes late fees; (g) assessing or collecting any late fees on a payment, which payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period, when the only delinquency is attributable to late fee(s) assessed on earlier installment(s); (h) misrepresenting required minimum payments on any billing or account statements provided to the student loan borrower; (i) charging late fees for payments made during a grace period; (j) misrepresenting the availability of repayment options to a student loan borrower, or failing to disclose all available repayment options to a student loan borrower who has inquired about alternative repayment options; (k) steering student loan borrowers into forbearance without disclosing all other available repayment options; (l) collecting any amount (including any interest, fee, charge, or expense incidental to the principal obligation), unless such amount is expressly authorized by the agreement creating the student loan or permitted by law; (m) failing to provide information to student loan borrowers to notify or confirm changes in account status, in accordance with the promissory note for the student loan or other applicable student loan documents; (n) knowingly or willfully failing to respond to student loan borrower complaints in a timely manner; (o) knowingly or willfully failing to provide a substantive response to the Student Loan Ombudsman unit within 30 days of being contacted by the Student Loan Ombudsman unit. (2) A student loan servicer that intends to sell or otherwise transfer the servicing of a student loan shall provide sufficient notice to the student loan borrower prior to the transfer of servicing including, but not limited to: the effective date of the transfer of servicing; identification of the transferee; and transferor and transferee contact information for servicing inquiries. (3) During the 60-day period beginning on the effective date of transfer of the ser- vicing of any student loan, if the transferor student loan servicer receives payment on or before the applicable due date, such payment may not be treated as late for any purpose. (4) A student loan servicer shall maintain appropriate policies and procedures with respect to the transfer of student loan servicing obligations, whether as transferor or transferee. Such policies and procedures shall include provisions to ensure that a student loan servicer transfers or receives all information regarding a student loan borrower, a student loan borrower’s account, and a student loan borrower’s student loan, and that such information is accurate. (5) A student loan servicer shall ensure that student loan borrowers are not subject to any negative consequences resulting from a sale, assignment, transfer, system conversion including, but are not limited to: negative credit reporting; the impo- sition of late fees not required by the promissory note; loss of or denial of eligi- bility for any benefit or protection established under federal law or included in a loan contract. (6) A student loan servicer shall include the contact information and the web page URL of the Student Loan Ombudsman unit, established pursuant to G. L. c. 12, § 35, within any account statements and any other written communications with student loan borrowers relative to the borrower’s student loan, including commu- nications via email but not including text messaging. (7) A student loan servicer shall maintain and make student loan borrower account records available through its website to such borrowers at no additional cost.