Complaints about poor servicing practices account for 64 percent of all complaints about student loans, according to the Consumer Financial Protection Bureau’s periodic summary of consumer complaints today. A third of complaints focused on consumers’ inability to repay, while just 3 percent of complaints were from consumers who had trouble obtaining a loan.
Student loan complaints increased 325 percent year-on-year after the CFPB last February updated its complaint form to accept complaints about federal student loan servicing. Borrowers complained frequently about receiving poor information from their servicers about income-driven repayment plans that would allow them to continue repaying their loans in the event of hardship. Rather, many reported that servicers directed them into plans that suspended monthly payments while interest continued to accrue. Consumers also reported confusion around loan forgiveness programs, and many said they experienced difficulties enrolling and staying in income-driven repayment plans.Email This Post