Millions of consumer credit reporting errors were caused by the transfer of student loan servicers, according to lawmakers.

• In 2023, the transfer of student loan accounts from NelNet to Mohela resulted in "millions of consumer credit reporting errors," according to lawmakers in a new letter to government agencies, as reported by CNBC.
• Nearly 2 million duplicate student loan records were reported on borrowers' credit reports, and hundreds of thousands of borrowers' credit scores were incorrectly reported for up to a year and a half, according to a letter sent by Sen. Elizabeth Warren, D-Mass., Ron Wyden, D-Oregon, and other lawmakers on Wednesday evening.

In 2023, the transfer of student loan accounts from NelNet to Mohela resulted in "millions of consumer credit reporting errors," according to lawmakers in a new letter to government agencies, as reported by CNBC.

Nearly 2 million duplicate student loan records and hundreds of thousands of borrowers' credit scores were incorrectly reported for up to a year and a half due to a change in loan servicers, according to a letter sent by Sen. Elizabeth Warren, D-Mass., Ron Wyden, D-Oregon, and other lawmakers to Consumer Financial Protection Bureau Director Rohit Chopra and U.S. Department of Education Secretary Miguel Cardona on Wednesday evening.

The lawmakers sent inquiries to NelNet, Mohela, Equifax, Experian, and Transunion as part of their investigation. They requested information on what had caused the issue and the number of borrowers affected.

The government agencies were urged by lawmakers in their letter to investigate the issues.

The lawmakers requested that the CFPB and ED utilize their supervisory and enforcement powers to ensure that the responsible parties are held accountable for these errors.

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According to the investigation, Mohela did not inform credit reporting companies about each loan transfer from NelNet, resulting in many borrowers having their single loan balance reported twice, once by each servicer.

The letter from lawmakers states that having duplicate student loan balances on a borrower's credit report can negatively impact their credit scores and make it harder for them to secure mortgages, car loans, and other forms of credit.

Mohela and Nelnet did not immediately respond to requests for comment.

According to the investigation by lawmakers, over 100,000 cases of reporting errors led to incorrect credit scores for borrowers, resulting in thousands of borrowers experiencing a drop of more than 20 points in their credit scores.

Approximately 7,500 complaints and disputes were submitted by borrowers to Mohela and credit reporting companies in an effort to correct errors.

The lawmakers were informed by the credit reporting companies that the duplicate balances have been resolved, according to the letter.

An Equifax representative acknowledged that certain student loan servicers failed to comply with consumer reporting guidelines when reporting loans.

The spokesperson stated that the Department of Education and servicers are collaborating to rectify inaccurate student loan accounts and ensure that they are correctly reflected on credit reports.

Experian and TransUnion did not immediately respond to requests for comment.