Evan Preston
ConnPIRG Education Fund
Thousands of American students are using the Consumer Financial Protection Bureau’s (CFPB) public Consumer Complaints Database to settle disputes about private student loans, according to a new report from the ConnPIRG Education Fund.
Sallie Mae, the student lending giant, generated the most private student loan complaints in Connecticut, and ranked first in every other state. Student loan borrowers in Connecticut carry $25,100 on average in total student loan debt.
“The CFPB levels the playing field for private student loan borrowers who may feel at the mercy of their student lender,” said Abe Scarr, Director of ConnPIRG Education Fund. “Filing a complaint to the complaints database can get real results for consumers.”
The report, “Private Loans, Public Complaints: The CFPB’s Consumer Complaints Database Gets Real Results for Student Borrowers,” is the second in a series that analyzes the data in the CFPB’s Consumer Complaints Database, which accepts complaints relating to a variety of financial products and services. This report focuses on complaints about private student loans, which are the riskiest and most expensive way to pay for a college education. Private student loans make up just 15% of the student loan market. However, student loan borrowers with more than $40,000 in total debt disproportionately carry private student loans.
Some key findings:
“Outside of mortgages, student loans are the largest form of consumer debt, hindering our economic recovery and hampering the dreams of millions of families nationwide,” said Senator Richard Blumenthal. “The crisis of college affordability is crippling our nation and we have a moral obligation to act—to both lower the cost of college and ensure that all students have access to affordable, reliable loan options. No student should be forced to rely on high interest, predatory loans to pursue an education. I am deeply troubled by the high numbers of complaints, particularly from Connecticut students, regarding private loans and I applaud the Consumer Financial Protection Bureau and ConnPIRG for shining light on the issue.”
The ConnPIRG Education Fund report comes just after the CFPB student loan ombudsman released its annual report last week on the private student loan marketplace which provides a more qualitative look at the complaints.
The report also highlights several changes that the CFPB should make to the public database, such as adding individual complaint narratives in order to share richer details about the problems private student loan borrowers are facing, in order to further help student consumers who may be considering taking on a private student loan. The report praises the CFPB for analyzing the complaints data on a regular basis to spot trends and to take action, and urges the bureau to do even more in the arena of aggregating data and taking regulatory action.
“The CFPB is making it possible for private student loan borrowers and other financial consumers to make it right when they’ve been wronged by their lender,” Scarr said.