CAPPS - Avocacy and Communication Professional Development

California Association of Private Postsecondary Schools

Refinancing Hurdles Still Beset Borrowers of Private Student Loans

08/02/2013

Rohit Chopra, the watchdog agency’s student-loan ombudsman, wrote in the report that 62 percent of complaints about private student loans focused on repayments and typically were concentrated on just eight companies, led by Sallie Mae, a major source of the loans. The bureau counted about 2,000 complaints from October 2012 to March 2013.

“Complaints submitted since October revealed borrowers had a number of concerns about processing of payments, obtaining documentation about their loans, finding accurate information about their loan status and repayment options, and accessing basic account information,” Mr. Chopra wrote in a blog post about the report, a midyear update on the state of private-student-loan complaints.

The snapshot of borrowing complaints, one in a series from the Consumer Financial Protection Bureau, appeared as the country has amassed $165-billion of private student-loan debt, which a previous report from the agency described as a drag on the economy.

Borrowers have described struggles to repay private student loans, which are notoriously more difficult to refinance than federal loans are, even though they often promise lower interest rates.