A student loan servicer may be defined as a person or entity responsible for collecting payments and interest, communicating with the student loan borrower regarding the, and performing other administrative tasks associated with maintaining a student education loan.
A Student Loan Servicer Surety Bond is a license and permit surety bond required by government entities to do business within that jurisdiction. These bonds are required as a protective measure in case the borrower suffers damages as a result of the servicer’s noncompliance with the law.
In the last few years, legislators in California, Rhode Island, Washington state and Washington D.C. have passed laws that require student loan servicers to be licensed/registered and bonded. The bond amounts tend to range from $30,000-50,000. The Washington D.C. bond amount is determined by the Mayor, according to Student Loan Ombudsman Establishment And Servicing Regulation Act Of 2016.