The Missouri Public Interest Research Group says thousands of students are using the Consumer Financial Protection Bureau to settle disputes over student loans. Midwest Federal Advocate for the group Alec Sprague says Missourians have filed more compaints against Sallie Mae than any other lender.
Although Private student loans make up just 15 percent of the student loan market, Sprague says the Consumer Financial Protection Bureau makes it possible possible for private student loan borrowers to make it right when they’ve been wronged by their lender. Most of those complaints stem from when those loans have to be repaid, he says.
He says the Consumer Financial Protection Bureau works to level the playing field for private student loan borrowers who may feel they are at the mercy of their student lender. Sallie Mae dominates the private student loan market, selling nearly 50 percent of the loans taken out.
After Sallie Mae, the lender that generated the most complaints in Missouri was AES/PHEAA. Sallie Mae, the student lending giant, generated the most private student loan complaints in Missouri, and ranked first in every other state. Student loan borrowers in Missouri carry $24,000 on average in total student loan debt.
“Filing a complaint to the complaints database can get real results for consumers,” he says.
The report, “Private Loans, Public Complaints: The CFPB’s Consumer Complaints Database Gets Real Results for Student Borrowers,” is the second in a series that analyzes the data in the CFPB’s Consumer Complaints Database, which accepts complaints relating to a variety of financial products and services. This report focuses on complaints about private student loans, which are the riskiest and most expensive way to pay for a college education. Private student loans make up just 15% of the student loan market. However, student loan borrowers with more than $40,000 in total debt disproportionately carry private student loans.
Some key findings:
· The CFPB has helped enable more than 330 consumers, or about eight percent of the total complaints filed, to receive monetary compensation to resolve their student loan complaints, with a median of $700 in monetary relief, and maximum relief of more than $75,000. More than 500 additional consumers, or twelve percent of the total complaints filed, have had their complaints closed with some form of non-monetary relief, such as modifying collections proceedings and providing assistance with documentation.
· The most complained-about lender in every state was Sallie Mae, which generated 37 complaints in Missouri alone. Nationally, Sallie Mae generated 46 percent of complaints about private student loans in the database. It dominates the private student lending market with an estimated 50 percent market share.
· After Sallie Mae, the lender that generated the most complaints in Missouri was AES/PHEAA.
· Missouri ranked 33 nationally in how likely borrowers in the state were to complain about their private student loans. Overall, borrowers in the Northeast were much more likely to file a complaint.
· Borrowers were most likely to complain about problems with repaying their loan, as issues with fees, billing, deferment, forbearance, fraud and credit reporting accounted for 65% of complaints.
The MoPIRG Foundation report comes just after the CFPB student loan ombudsman released its annual report last week on the private student loan marketplace which provides a more qualitative look at the complaints. For that report, click HERE.