Consumer Financial Protection Bureau to Take Complaints on Private Student Loans
Americans having trouble with student loan payments or issues with the borrowing system now have a new place to go for help.
The Consumer Financial Protection Bureau, the newly created agency tasked with regulating private student lenders and other consumer affairs, announced recently that it has created a student loan ombudsman position to assist all borrowers and review filed complaints in accordance with the Consumer Protection Act.
In an interview with Campus Progress, the bureau’s new director, Richard Cordray, said his agency is prioritizing student loan issues.
“Among the things we are expecting and are interested in hearing about from [borrowers] are trouble making full payments, any kind of confusion or misleading advertising or marketing of private student loans, and billing disputes—which we find with all of our products get a high level of complaints— and issues around deferment and debt collection,” he said.
A new report released by the Federal Reserve Bank of New York shows that these repayment issues will continue to rise. According to the report, Americans are carrying a total of $870 million in student loan debt, with 46 percent of borrowers in deferral or forbearance and another 14 percent with at least one past-due account. That’s about 37 million people in debt, and two-thirds are under 40.
The bureau created this complaint system to mitigate the stress that accompanies the financial burden of loans and as an effort to ensure that the process of repaying private loans can become as clear and hassle-free as possible.
“Our sense is, from getting prepared to launch this effort, that federal student loan borrowers have gotten help over the years from the Department of Education, but private student loan borrowers had really nowhere to turn and nowhere to seek help,” Cordray said. “Starting this week, that has changed. They can come to us with their concerns and problems and seek help from us and we will stand on their side.”
This new complaint system comes as the next step in helping students and their parents manage the often heavy financial burden of postsecondary education. The system compliments the services and information already released to help students, like the “Financial Aid Shopping Sheet,” which outlines pertinent financial aid information, an online, interactive student debt repayment assistant, and a notice for past borrowers in private student loan sector can share experiences and advice.
To find out more information about the Bureau’s new private student loan consumer response function or to file a private student loan complaint, borrowers can:
- Call the toll-free phone number at 1-855-411-CFPB (2372)
- Visit online at www.consumerfinance.gov
- Fax the CFPB at 1-855-237-2392
- Mail a letter to P.O. Box 4503, Iowa City, Iowa 52244
Jeff Raines is a journalism intern with Campus Progress. You can follow him on Twitter @Jeff_Raines.