CFPB Private Education Loan Ombudsman Issues 2020 Annual Report
October 29, 2020 / Source: CFPB
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) Private Education Loan Ombudsman (Ombudsman) today issued the 2020 Annual Report, which shows that that from September 1, 2019, through August 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 percent 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 percent compared to that of the previous year (2019).
The overall decrease in complaints is likely not attributable to a single factor. For example, CARES Act relief (explained more fully in section 2.3.5 of the report) likely contributed significantly to the decrease since March 2020. However, this does not account for the steady decrease in complaints that preceded the CARES Act. Though no single factor may be responsible for the decrease, and it is difficult to quantify and assign attribution between and among potential factors, the following factors may have contributed to the overall decrease: 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. 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 report provides analysis of student loan complaints and the student loan market, including socio-economic and racial gaps. It notes Bureau activities regarding student loans which includes the following: COVID-19 resources; entering into a Memorandum of Understanding with the Department of Education regarding complaints; supervisory examinations and prioritized assessments; enforcement actions; and creating a Paying for College tool. Finally, the report makes recommendations regarding student loan relief, socio-economic and racial graduation gaps, borrower education and empowerment, and student loan debt relief scams.
To review the full report, visit: https://files.consumerfinance.gov/f/documents/cfpb_annual-report_private-education-loan-ombudsman_2020.pdf
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.