Experian queried by Warren on student loan credit reporting

U.S. Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), and Ron Wyden (D-Ore.) have raised concerns with the Consumer Financial Protection Bureau (CFPB) and the Department of Education (ED) regarding credit reporting errors linked to the transfer of student loan accounts from Nelnet to MOHELA in 2023. The senators’ investigation found that MOHELA’s failure to provide advanced notice of the loan transfers to credit reporting agencies (CRAs) contributed to nearly two million duplicate student loan records appearing on borrowers’ credit reports. These errors, which affected hundreds of thousands of borrowers over a period of up to 1.5 years, led to reduced credit scores and complications in securing mortgages and other forms of credit.

The three major CRAs—Equifax, Experian, and TransUnion—reported that they did not always receive the required advanced notice from MOHELA, which is standard practice for such transfers. Over 200,000 consumers were identified as affected, with more than 100,000 experiencing incorrect credit scores and approximately 14,000 suffering significant score declines. Borrowers submitted around 7,500 complaints and disputes to address the errors, but neither MOHELA, Nelnet, nor the CRAs have taken responsibility or offered compensation to affected individuals.

The lawmakers have urged the CFPB and ED to investigate the issue further and ensure that safeguards are in place to prevent similar errors in the future. The findings highlight ongoing challenges in the student loan servicing system and underscore the need for greater oversight and accountability in credit reporting practices.