A recent report conducted by the Consumer Financial Bureau finds that many private student loan borrowers are experiencing great financial distress. Consequently, some are driven into default.
The CFPB Student Loan Ombudsman released a report entitled Annual Report of the CFPB Student Loan Ombudsman, which outlines some of the complaints logged by these borrowers. The top complaint was that they do not receive enough information or assistance from lenders and servicers when they face difficulty paying their student loan.
Some borrowers say that when they tried to get more information by calling their lender or servicer, they received conflicting or inaccurate information and were frequently transferred among call center staff. In addition, some say they were not provided any options, which resulted in default.
“Struggling private student loan borrowers are finding themselves out of luck and out of options. Lenders and servicers must redouble their efforts to deal with these distressed borrowers” said CFPB Director Richard Cordray.
For more information on how you can manage your educational loans, read Weighing Your Student Loan Options.