If a private student loan co-signer either dies or declaresbankruptcy, some lenders are pressuring the borrower to immediatelypaid the loan in full. The rising rate of “auto defaults” in suchcases raised concerns with the CFPB, which issued a report Tuesdayon the topic.

The CFPB analyzed more than 2,300 private student loancomplaints and more than 1,300 debt collection concerns related tostudent loan debt submitted over the past six months. Many focusedon auto default payment demands issued when co-signers die ordeclare bankruptcy, even when the loan is current and is being paidon time.

Many complaints also describe the bureaucratic barriersborrowers face in releasing co-signers from their loans, a commonlyadvertised benefit that could help avoid auto-defaults. The CFPBstudy contains a consumer advisory and sample letters to helpborrowers overcome obstacles to co-signer release.