As a follow up to its November 2011 call for feedback on the private student lending market, the Consumer Financial Protection Bureau has published nearly 2,000 comments from individual consumers online this week, the agency announced.
The responses describe borrowers’ experiences with private student loans, and the CFPB said while comments vary widely, three common themes arose from the feedback.
First, the agency said, many borrowers said they felt unsatisfied with the information provided to them by their lenders, and as a result, turned to their schools’ financial aid offices for advice on which loan products to use.
Second, many borrowers said they’re having a hard time managing their private student loan debt and regret pursuing a degree in the first place.
And third, many said the loan repayment process has been difficult to navigate. They cited key repayment issues as billing and record-keeping mishaps, lost payments, onerous debt collection practices and limited options for revising repayment plans in the cases of financial hardship or unemployment, according to the CFPB.
“Borrowing for college can be complex and confusing,” said CFPB Director Richard Cordray. “Private student loans provide little room for error and students need to know before they owe. The bureau is committed to helping students get clear information to make the best choices for their financial futures.”
The CFPB has also solicited data and information on existing private student loan complaints from entities such as state agencies, higher education institutions, consumer and legal advocates, and lenders by publishing a Notice and Request for Information in the Federal Register this week.
The agency also said it sent a letter to state attorneys general and higher education officials welcoming their participation in its private student loan investigation efforts.
The agency initiated requests for private student loan feedback to gather information for a private student loan report to Congress, which the CFPB and Department of Education are required to complete by July 21, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Launched in July 2011 by Congress as the primary regulator of consumer protection in the U.S., the CFPB only has regulatory authority over three credit unions: Navy FCU, Pentagon FCU and State Employees’ Credit Union of North Carolina.