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Sound off on student loan servicing

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A few weeks ago, we announced that we’re gathering information about student loan servicers — the companies responsible for collecting and processing student loan payments. Although student loans are usually thought of as a younger American issue, in reality there are an increasing number of older Americans paying back student loan debt. Many older consumers struggle with student loan debt, sometimes forcing them to delay retirement or threatening their financial security when in retirement.

Older consumers may hold student loan debt because they are still paying off loans that were:

  • accrued when they were much younger
  • acquired during the course of a mid- or late-career switch, or
  • taken out for the education of their children or grandchildren.

According to a recent Government Accountability Office report, here are some concerning trends about older consumers and student loan debt:

  • Between 2005 and 2013, outstanding federal student loan debt owed by older borrowers grew from less than $3 billion to more than $18 billion, more than a six-fold increase.
  • Delinquency rates for older borrowers doubled between 2005 and 2012, rising from 6 to 12.5 percent.
  • Older borrowers defaulted on federal loans at much higher rates than other borrowers. More than a quarter of federal loans owed by borrowers ages 65-74 are in default. For borrowers 75 years or older, more than half of outstanding federal loans are in default.
  • The number of older consumers whose social security benefits were offset for the collection of federal student loan debt increased nearly 400 percent from 2002 through 2013. For consumers 65 or older the increase was roughly 500 percent.

Many older consumers who have submitted complaints to the Bureau about student loans report being billed for loans they never borrowed, receiving harassing and abusive debt collection calls, being wrongly charged fees because of the servicer’s accounting errors, and having their credit rating impacted by incorrect reporting of student loan information.

We now want to hear from you. If you’ve had problems with student loan debt or run into repayment roadblocks, share your story. Here are just a few things you can tell us about:

  • Disclosure, accessibility, and availability of options to release a co-signer from their legal obligation to repay a co-signed student loan
  • Disclosure, accessibility, and availability of options to discharge or reduce student loan debt in the event of the death or disability of a borrower or co-signer
  • Processing, allocation, and application of loan payments
  • The imposition and disclosure of late fees
  • The complaint resolution process (including how allegations of fraud are resolved)
  • Furnishing of credit information to credit reporting agencies

To share your story for the public record, go to regulations.gov or click this link to send us an email. Please don’t include sensitive information like account numbers and social security numbers. Submit your input and ideas by July 13, 2015. Having trouble with a link in this blog post? You can also submit an official comment online.

If you experience any problem with a student loan, you can submit a complaint online or call us at (855) 411-2372. We’ll forward your complaint to the company and work to get a response from them.

Tell us about your student debt stress

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If you are paying back student loans, you are not alone. Over 40 million Americans are repaying more than $1.2 trillion in outstanding student loan debt. Significant debt can have a domino effect on the major choices you make in your life: whether to take a particular job, whether to move, whether to buy a home, even whether to get married. For many of you, student debt stress makes these big milestones seem out of reach.

We’ve heard that some student loan servicers (the company that sends you a bill each month) may be adding to that stress. We’re seeking information from the public about the student loan servicing practices that may make it harder to get ahead of your debt.

We want to hear from you about your experience with your student loan servicer. If you’ve run into roadblocks, tell us about it – for example, we want to know if you’ve had payment processing problems, servicing transfer snags, communication confusion, or any other challenges when repaying your student debt.

Simply click this link to send us an email, which will be included in the public record. Please don’t include sensitive information like account numbers and social security numbers. We’re accepting comments through July 13.

In the infographic below, you can learn more about roadblocks some borrowers have encountered when dealing with their student loan servicers.

http://files.consumerfinance.gov/f/201505_cfpb-student-debt-stress-header

We’re also calling on other stakeholders, including financial institutions, colleges, consumer advocates and policy experts to share their feedback. A full list of questions we’re asking the public are available in our Request for Information.

In the next few weeks, we encourage you to check back for more information about our work to strengthen student loan servicing and to hear the experiences of others with student debt. Be sure to tell others about the chance to include their stories in the public record. Spread the word to friends and family with student debt stress using  #StudentDebtStress on social media, but remember you must click this link to email an official comment.

If you have questions about repaying your student loans, check out our Repay Student Debt feature of Paying for College to find out how you can tackle your student loan debt.

If you have a problem with your student loan, you can submit a complaint online or call us at (855) 411-2372.

Having trouble with a link in this blog post? You can also submit an official comment online.

Reminder: What happens to your student loans if your school is shut down

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When you’re told that your college will be shutting down, there can be a lot of uncertainty about what comes next. In light of recent closures of certain for-profit colleges, we wanted to share some helpful advice to help you navigate the situation.

This information and answers to other common questions about student loans are also available through Ask CFPB.

If you have federal student loans

If you have federal student loans and are currently enrolled or recently left a college or university that has shut its doors, you may be able to discharge (cancel) your loans by applying for a closed school discharge, which requires you to fill out a form.

This option is only a possibility if your school closes. If you are attending a school that is sold, you may not be eligible to ask for discharge under this process, even if your school no longer offers your program of study.

If you do have your federal loans discharged and you end up transferring credits to a similar program, you may have to pay back the loans that were discharged.

If you have private student loans

Generally, if you have private student loans, you may still be responsible for repaying them. However, some states may have programs that assist students with private student loans in the event of a school closure. In addition, some private student lenders may offer options to assist certain borrowers in this situation.

If you think you won’t be able to afford to repay your private student loan, you should contact your student loan servicer immediately to learn more about your options. And if you run into trouble, you can also submit a complaint online or by calling (855) 411-2372.

If you’re offered an option for a “teach-out” to complete your program

If your school has announced that it is closing, you may be offered a “teach out,” an arrangement through which you may be able to complete your program and receive your degree or certificate.

If you accept a “teach-out” to complete your program at your school or another school, you will be responsible for repaying all of your student loans. If you decline a “teach-out” offer and the school closes, you may not have to pay back your federal student loans.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about the CFPB’s work for students and young Americans, visit consumerfinance.gov/students.

Save the date, Milwaukee!

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Join us for a field hearing in Milwaukee on student debt. The hearing will take place on Thursday, May 14 at 10 a.m. CDT. The event will be held at:

Wisconsin Center
400 W Wisconsin Avenue
Milwaukee, Wis. 53203

The hearing will feature remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

This event is open to the public and requires an RSVP. Send us an email to RSVP. A live video will be streamed here on our blog.

If you need an accommodation to participate, you can make a request.

See you there!

Updated on May 8, 2015 to include the venue information.

Special announcement for Corinthian students

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Along with the U.S. Department of Education, today we announced more than $480 million in forgiveness for borrowers who took out Corinthian College’s high-cost private student loans. ECMC Group, the new owner of a number of Corinthian schools, will not operate a private student loan program for seven years and agreed to a series of new consumer protections.

As part of today’s announcement, we’re also releasing a special bulletin for current and former students enrolled at Corinthian-owned schools with more information. We urge you to read it carefully so you fully understand your options and obligations on your student loans.

If you experience difficulty with your student loan you can submit a complaint online or by calling (855) 411-2372. You can also find more information about options for repaying your student loan on our website.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young Americans, visit consumerfinance.gov/students.