This week the Consumer Financial Protection Bureau released a report analyzing complaints the CFPB has received from private student loan borrowers. According to the report, private student loan borrowers face payment processing pitfalls that can lead to increased costs, prolonged repayments and harm to their credit profiles. The CFPB is also issuing a consumer advisory today to help certain borrowers communicate their payment preferences to servicers.
“Repaying a student loan should be simple,” said the director of CFPB. It seems that processors are maximizing fees and penalties. This undermines the customers. Student loan borrowers deserve better and this needs to stop. Many individual student loan borrowers want to pay off their loans but have such high interest rates that it makes it impossible.
Earlier this year, the CFPB announced that outstanding student debt totals nearly 1.2 trillion. The Bureau also estimates that 7 million student loan borrowers are now in default on their debt. The high student debt impacts many things, such as homeownership, retirement security, entrepreneurship and career choice.
The report also follows efforts of CFPB to help make the student loan market work better for consumers. Student loan borrowers are able to use REPAY STUDENT DEBT, an interactive web tool designed to help consumers navigate their repayment options or they can use ASK CFPB to find answers to common questions. Borrows that run into trouble have the option to file a complaint with CFPB.