Required Report on Student Loan Borrower Complaints Not Yet Published
Inside Subprime: Jan 9, 2018
By Aubrey Sitler
Each year, the Consumer Financial Protection Bureau (CFPB) is statutorily required to publish reports on consumer complaints. Specifically, in October of each year from 2012 to 2017, the CFPB published its Annual Report of the Student Loan Ombudsman, which always detailed the nature and volume of student-loan borrower complaints submitted by consumers through the CFPB’s website. However, no such report was released in 2018, and as of today, it is 4 months overdue.
This report’s absence is problematic for a number of reasons. Most importantly, it raises questions about what, if anything, the CFPB is doing with the complaints it receives from student-loan borrowers.
As Persis Yu, the Director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, points out: “The fact it’s not come out means that there are problems that are not being addressed… Every consumer that takes the effort to go and complain to a federal agency speaks for a lot of other consumers. When you see the complaint coming up over and over again in a complaint database like that it means there’s a real problem.”
Although it might be tempting to wonder if this all just means that student-loan borrowers aren’t submitting as many legitimate complaints as they once were, in reality, it appears to be the opposite. According to a report released by the Student Borrower Protection Center (SBPC), a student financial aid advocacy organization founded by former CFPB staffers, consumers have logged 13,283 complaints regarding student loan servicing and collection practices with the CFPB. These consumers represent all 50 states and a number of backgrounds and professions, ages, loan types, and repayment stages within the $1.6 trillion student loan industry.
These complaints include public sector workers who have been misled by loan forgiveness programs, family members who co-signed private loans and are struggling to get released from them despite adhering to their contracts, and consumers who have experienced unannounced or unfair repayment plan changes.
Ultimately, this SBPC report offers what the CFPB is refusing to acknowledge by providing “further evidence that student loan borrowers across the country are being squeezed between the burden of historic student debt and widespread abuses by student loan companies that are newly empowered to prioritize corporate profits over consumers’ rights.”
The CFPB’s failure to produce this report is one of many ways in which the Bureau has heavily shifted away from its intended role as a financial watchdog and consumer advocacy agency. Last year, then-acting-director Mick Mulvaney reorganized the Bureau, including moving its Office of Students and Younger Consumers, which investigates student loan problems, to sit within its financial education office — a move that many saw as diminishing the office’s power, significance, and level of effort.
As MarketWatch reports, the CFPB continues to decline to comment on this issue.