CFPB report shows an ongoing complaint decline since 2017 due to borrower education and outreach, industry participants’ compliance management systems, and other reasons.
10/28/2020 14:00
Complaints related to private or federal student loans declined from 2019, according to the latest annual report from the Consumer Financial Protection Bureau Private Education Loan Ombudsman.
According to a news release on the report, between Sept. 1, 2019, and Aug. 31, 2020, the bureau handled approximately 7,000 complaints related to private or federal student loans.
“This is an overall decrease from last year and continues a trend from 2017. More specifically, for the year ending August 31, 2020, the bureau handled approximately 1,900 private student loan complaints, a decrease of approximately 33% compared to that of the previous year (2019), and for the year ending August 31, 2020, the bureau handled approximately 5,000 federal student loan complaints, a decrease of approximately 24% compared to that of the previous year (2019),” according to the news release.
The bureau found that relief under the Coronavirus Aid, Relief and Economic Security (CARES) Act contributed to the decline in complaints since March 2020, but other factors came into play before that time.
Borrower education and outreach by federal and state agencies and regulators; borrower education and outreach by consumer advocates; and continued maturation of some industry participants’ compliance management systems, complaint monitoring systems, and their internal consumer advocate and ombudsman offices may have contributed to the decline in complaints, according to the CFPB.
Companies provided timely responses to 99% of the complaints.
“As a share of household debt, private and federal student loan debt is second only to home mortgage debt, with current outstanding student loan debt totaling more than $1.677 trillion,” the CFPB reports.
View the complete report here for more analysis of student loan complaints and the student loan market.