Colleges and universities with in-house lending operations are breaking a federal consumer protection law by withholding transcripts from students who have fallen behind on their loans, the CFPB said Thursday.
The Consumer Financial Protection Bureau, in a report on its supervision of student loan servicers and some higher education institutions, said the practice of withholding transcripts from students until they make outstanding payments on their loans violates the Unfair, Deceptive and Abusive Acts and Practices (UDAAP) standard.
The report also covers trade schools, beauty academies, and other post-secondary schools issuing their own loans that are subject to the CFPB’s oversight. ...
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