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CFPB Snapshot Spotlights Student Loan Complaints
April 25, 2017
On Tuesday, April 25, 2017, the CFPB released a monthly complaint snapshot highlighting consumer complaints about student loans. The snapshot shows that both private and federal student loan borrowers nationwide report persistent servicing breakdowns that may sideline their path to repayment. April’s report also highlights trends seen in complaints coming from Nevada. As of April 1, 2017, the Bureau had handled approximately 1,163,200 consumer complaints across all products.
“Student loan servicers play an important role in helping millions of people manage the loans they take out to pursue an education,” said CFPB Director Richard Cordray. “Unfortunately, borrowers continue to report difficulties and setbacks as they try to work with their servicers to manage their loan debt.”
Category spotlights included:
Student Loans | At $1.4 trillion, student loan debt represents the U.S.’s second largest debt market behind mortgages. More than 44 million student loan borrowers rely on the companies servicing their loans to manage all aspects of repayment, including providing borrowers with available repayment options when they are struggling to repay their loans.
The Bureau has also reported on consumer complaints to highlight the unique challenges that certain populations of consumers with student loan debt face, including older Americans, servicemembers, veterans with disabilities, and previously defaulted borrowers.
National Complaint Overview | As of April 1, 2017, the CFPB had handled approximately 1,163,200 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include:
- Complaint volume: For March 2017, debt collection was the most-complained-about financial product or service. Of the approximately 28,000 complaints handled in March, there were 8,711 complaints about debt collection. The second most-complained-about consumer product was credit reporting, which accounted for 5,498 complaints. Mortgages were third most-complained-about financial product or service, accounting for 3,965 complaints.
- Product trends: In a year-to-year comparison examining the three-month time period of January to March, student loan complaints showed the greatest increase—325 percent—of any product or service. The Bureau received 773 student loan complaints between January and March 2016, while it received 3,284 complaints during the same time period in 2017. Part of this year-to-year increase can be attributed to the CFPB updating its student loan complaint form to accept complaints about federal student loan servicing, starting in late February 2016. The Bureau also initiated an enforcement action against a large student loan servicer during the time period covered by this report.
- State information: Montana, Georgia, and Wyoming experienced the greatest year-to-year complaint volume increases from January to March 2017, versus the same time period 12 months before; with Montana up 54 percent, Georgia up 46 percent, and Wyoming up 45 percent.