Alert June 26, 2012

CFPB Focuses on Private Student Loans

The CFPB recently has taken three steps in line with its directive from the Dodd-Frank Act to compile and analyze data on private student loan borrower complaints and make policy recommendations to the Secretary of Treasury, the Secretary of Education and Congress. First, the CFPB published almost 2,000 comments from borrowers about their experiences in the private student loan market. In an accompanying press release, the CFPB identified common themes in the comments, including the reliance of borrowers on school financial aid offices for guidance on which products to use, borrowers struggling to meet their obligations in today’s economy, and difficulty navigating the repayment process. Second, the CFPB issued a notice and request for information seeking data and information on existing private student loan complaints from state agencies, colleges and universities, lenders and other interested parties. Specifically, the CFPB is seeking information about the complaints that are being submitted by borrowers and the processes institutions have in place to respond to those complaints. Comments are due by August 13, 2012. Finally, the CFPB sent a letter to state attorneys general and state higher education officials inviting their participation in the CFPB's review of the private student loan market. The state agencies were specifically solicited because they may currently be receiving private student loan complaints.