The Consumer Financial Protection Bureau says it now wants to hear from borrowers who have had problems with their private student loans. The CFPB has oversight on these loans and even has a ombudsman who is supposed to help borrowers and review complaints.
Students typically take out private loans once they have exhausted their federal loan options. Federal loans — which should be a student’s first choice if they need to borrow — offer some friendly terms, particularly if a new grad can’t land a job. In fact, you can have your federal debt wiped out if you work in certain fields after graduation.
But some twentysomethings I have encountered said they didn’t even know there were two kinds of loans. They end up borrowing from private lenders, and then get into worse debt when they have a tough time repaying these less flexible private loans.
The CFPB says it expects financial institutions to respond within 15 days of a complaint on how they will address the problem. The agency says the complaint is expected to be closed in 60 days.
So borrowers, file a complaint if you have a gripe. And let us know how it goes.