RSSThe Consumer Financial Protection Bureau recently released a mid-year update to its analysis of private student loan complaints, which it began collecting in March 2012. The first report, released October 2012, covered 2,857 complaints received between March 2012 and September 2012; the July report covers 2,002 complaints received between October 2012 and March of this year. In the earlier report, 87 percent of complaints where made against seven companies: Sallie Mae, American Education Services (PHEAA), Citibank, Wells Fargo, JPMorgan Chase, ACS Education Services and KeyBank. This year’s report reveals that 75 percent of complaints were made against eight companies (the same seven as well as Discover).
In both reports, the majority of complaints (approximately 60 percent), were in reference to problems with repaying the loan. Roughly another third were in regard to problems encountered when loan repayments could not be met.
Although neither report is designed to illustrate the frequency with which particular problems occur, there were some reoccurring themes. Borrowers complained that they were unable to modify the repayment terms of their loan, whether in order to lower monthly payments or to reflect an improved credit profile. Processing of overpayments and underpayments, complications with release of co-signers and communication problems were also sources of dissatisfaction. Active-duty service-members further expressed difficulty with the application of the Service-members Civil Relief Act rate cap.
Neither do the reports attempt “to present a statistically significant picture of issues faced by borrowers.” The CFPB suggests, rather, that they may help illustrate “where there is a mismatch between borrower expectations and actual service delivered” as well as increasing understanding of the “diversity of customer experience in the market.” The October report further suggests that “proactive attention” to the issues raised in the report “might mitigate the need for additional regulatory attention.”
