Students Find Help Resolving Problems With Private Loans
The new federal agency that has positioned itself as a listening ear and champion for Americans wronged by the financial system is coming through for college students.
A new report shows the Consumer Financial Protection Bureau helped more than 330 people receive financial compensation after making complaints to the agency about unfair practices by lenders for their student loans.
"Private Loans, Public Complaints," was released Thursday by the U.S. PIRG Education Fund, an independent research and public interest organization based in Washington. It analyzed complaints filed on the agency's public Consumer Complaints Database and discoverd 8 percent (330 total) were resolved, with students receiving between $700 and $75,000 in relief. Another 12 percent of submissions(representing 500 borrowers) had complaints closed with nonmonetary agreements, such as changes in collection proceedings.
The largest student-loan lender, Sallie Mae, generated the most private student-loan complaints nationally.
The most complaints about private loans came from borrowers in the District of Columbia, and students in the Northeast were much more likely to file a complaint, the report found.
Student advocacy groups have warned families that the terms of private loans are not as favorable as those secured by the federal government with protections for consumers. There has been a recent push by consumer groups to improve counseling around private loans and encourage more transparency around their terms.
The percentage of undergraduate students taking private education loans fell from 14 percent in 2007-08 to 6 percent in 2011-12, according to the latest College Board report released this week.