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CFPB Now Taking Private Student Loan Complaints

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) is now accepting complaints from borrowers having difficulties with their private student loans. The CFPB will assist all borrowers experiencing problems taking out a private student loan, repaying their private student loan, or managing a student loan that has gone into default and may have been referred to a debt collector.

“The ability to work hard and better yourself through education is part of what makes this country so great,” said Richard Cordray, Director of the CFPB. “But getting a higher education can mean taking on significant debt – a big decision with a lot of consequences. The CFPB is now the one-stop federal agency where all private student loan borrowers can ask questions, get information, and file a complaint about this important market.”

Student loans have now surpassed credit cards as the largest source of unsecured consumer debt. Millions of students turn to private loans to pay for college when scholarships and federal student loans do not cover the full costs. But unlike federal student loans, private student loans do not generally have the same borrower protections such as military deferments, discharges upon death, or income-based repayment plans.

Until recently, private student lenders have only been regulated by a patchwork of state and federal authorities. Prior to the Dodd-Frank Wall Street Reform and Consumer Protection Act, there was no federal supervisory program over nonbanks that issued student loans. That authority has now been given to the CFPB. Among its reforms, the law created a private student loan ombudsman to assist borrowers and review complaints. The ombudsman, Rohit Chopra, is also responsible for examining the complaints in order to develop recommendations to Congress and other federal government agencies.

Consumers can get help from the CFPB on student loans in a variety of ways including by the Bureau website, telephone, mail, and fax. Consumers can file complaints about any kind of student loan. While the CFPB will alone manage the private student loan complaints, the CFPB will work closely with the Department of Education to route complaints that fall under their purview as the overseer of federal student loans. The agencies executed a memorandum of understanding to ensure close coordination. Examples of federal loans include Direct loans, Stafford loans, Perkins loans, and PLUS loans.

Among the complaints that the Bureau anticipates receiving:

  • Difficulties making full payment;
  • Confusing advertising or marketing terms;
  • Billing disputes;
  • Deferment and forbearance issues; and
  • Debt collection and credit reporting problems.

Working with the Department of Education, the CFPB released a Know Before You Owe “Financial Aid Shopping Sheet,” which is a draft of important financial aid information that colleges could provide to students and their families, including information about monthly debt payment levels after graduation. The CFPB also launched a Student Debt Repayment Assistant, an interactive tool which tens of thousands of Americans have already used to help navigate their repayment options on student loans.

In November, the Bureau published a Notice in the Federal Register to ask students, lenders, servicers, schools, and other members of the public to share their experiences with the private student loan market. The Bureau received thousands of comments from consumers, industry, and the higher education community, which will be analyzed as part of a report to Congress on the private student loan market, to be released later this year.

The CFPB has been taking complaints in categories of consumer financial products and services since launching on July 21, 2011. The Bureau started by taking credit card complaints. In December, the Bureau expanded and began taking complaints on mortgages and other home loans. And, on March 1, the Bureau began taking complaints on checking accounts.

The Bureau expects financial institutions to respond to complaints within 15 days with the steps they have or plan to take, and expects complaints to be closed in 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website. Each complaint will be processed individually and consumers will have the option to dispute the lender’s resolution.

The Bureau sent a letter this week to more than 6,000 university officials across the country notifying them of the new complaint system, so they can direct students and alumni to get help with their student loans.

To find out more information about the Bureau’s new private student loan consumer response function and to file a private student loan complaint, borrowers can:

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit