The Consumer Financial Protection Bureau (CFPB) private education loan ombudsman has issued its 2020 annual report.
From Sept. 1, 2019, through Aug. 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 Aug. 31, 2020, the bureau handled approximately 1,900 private student loan complaints, a decrease of 33 percent compared with the previous year (2019), and for the year ending Aug. 31, 2020, the bureau handled approximately 5,000 federal student loan complaints, a decrease of approximately 24 percent compared with the previous year (2019).
The CFPB said the overall decrease in complaints is likely not attributable to a single factor. For example, CARES Act relief 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.
Although no single factor may be responsible for the decrease, and it is difficult to quantify and assign attribution between and among potential factors, the bureau said 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 percent 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.
The report summarized 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. The report also makes recommendations regarding student loan relief, socio-economic and racial graduation gaps, borrower education and empowerment and student loan debt relief scams.