The Consumer Financial Protection Bureau (CFPB) is helping hundreds of college graduates get out of trouble with private student loans, according to a new U.S. Public Interest Research Group analysis of the agency's complaint database. Disgruntled borrowers received a median of $700 in monetary relief, and some collected as much as $75,000. An estimated 500 borrowers had their complaints addressed via non-monetary relief, including "modifying collections proceedings and providing assistance with documentation," the analysis said.
The report indicated that while the CFPB is effective, it also should do more to raise awareness of the complaint process. "The CFPB uses the database not only to serve aggrieved consumers on an individual basis, but to spot trends and use that to dictate their guidance and rulemaking, which is completely unprecedented," said Chris Lindstrom of the U.S. PIRG Education Fund. "We'd like the bureau to do even more to make the database both a definer of what’s right and wrong in private student lending as a whole, and a deterrent against borrower abuse."
Private student loans make up 15 percent of overall education debt, but four out of five graduates who took out more than $40,000 in student loans used private sources. Unlike federal loans, private lenders do not have to offer the same lower interest rates or income-based repayment options. The CFPB has received more than 4,300 complaints regarding private student loans since March 2012, with Sallie Mae emerging as the most-complained-about lender in 48 states -- although this is partly due to its size and market share.