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The Consumer Financial Protection Bureau will use the data to make recommendations to Congress, which could include changes to the private student loan market.
June 13 -
Two years after the federal government largely took over the student loan market, the remaining banks in the industry are preparing for another shakeup.
April 9 -
Surveys show that what Americans want most is a good job, no surprise there. Over the last few decades, the best jobs have been in the public sector and those requiring a college degree. But the productivity of a growing public sector already suffers from rising costs and diminishing returns that impede economic growth, as in Greece where public sector employment doubled in the last decade or in Spain, where youth unemployment is 50%.
April 3 -
The consumer bureau's student-loan ombudsman told bankers this week that problems facing the sector could have long-lasting effects on the economy for years to come.
March 23 -
The Consumer Financial Protection Bureau is asking students, colleges and lenders for information on the private student loan market that will inform a joint report to Congress required by the Dodd-Frank Act.
November 16
WASHINGTON — Private student loan debt is delaying young borrowers' plans to start a family, buy a house or even use the expensive degrees for which they paid, according to thousands of consumers who submitted comments to the Consumer Financial Protection Bureau for a study the agency is conducting with the Education Department.
The agencies released more than 2,000 comment letters this week as they work toward completing the study by the end of July.
The common theme: former students young and old are struggling to make their monthly payments, and are unable to convince their lenders or services to lower the payments.
"The facts are that the private student loan industry is an incredible drain on our society," wrote one borrower, who said he works in the financial industry and pays approximately half of his monthly income toward student loan payments. "If you think things are bad now, just wait. Our generation will be responsible for increased national debt, less spending, greater incidence of bankruptcy, and more public assistance use."
Indeed, the bureau has already started sounding that alarm.
At a banking conference in March, the CFPB's student loan ombudsman said increasing loan debt — which has topped $1 trillion — could hamper the housing market recovery in the near term, and have long-lasting effects on other bank products.
If the cost of higher education continues to grow in excess of inflation or GDP, and wages remain fairly flat, it could mean banks will be originating fewer mortgages and auto loans over the next couple decades and have fewer private wealth clients in 30 years, Assistant CFPB Director Rohit Chopra said.
"All of the money that people are not able to traditionally save right after college is less money that they would put away in tax-deferred retirement plans, pension plans," Chopra said.
The CFPB announced Wednesday that it is seeking additional data on student loan complaints from state law enforcement officials and state financial regulators, consumer advocates, colleges and universities, lenders and other consumers.
Many of the letters the bureau has already received include stories of unresolved complaints, including an inability to determine who owns or services a loan, inconsistent documents and communications from lenders, complex disclosures and confusing information from colleges about the advantages of federal versus private student loans.
One borrower who said he is struggling to repay $55,000 in private loans through Sallie Mae, said it was "nearly impossible" to reach someone at the company who could help him lower his payment.
Unlike subsidized federal loans, the borrower said, the private loans do not qualify for 25-year extended repayment, income-based repayment options, or income-sensitive repayment options.
"Had I known what I do now when I was looking into colleges, I probably wouldn't have gone, or joined the military," he wrote. "My degree is not worth this."
Another borrower paying more than $900 a month in student loan payments said it seemed that the only way she could get someone to help her was if she knew the exact word or phrasing of the type of relief she was seeking.
"The hardest part about my financial hardship," the woman wrote, "is that I was really interested in starting a family at age 30, and as I am 26 and still paying $900 a month, while applying everything extra to my smaller loans, the rate at which my loans are lowering will not be fast enough to pay off anytime soon, and I definitely cannot afford to raise a family with these payments."
"If I could only stretch the payments out over 30 years, my life would be extremely different," she added.
One 68-year-old woman said she took $10,000 in student loans in 1983 to go back to school after she lost her job. Today, after nearly 30 years of struggling to set up payment plans with collection agencies, she owes more than $30,000, which is being garnished from her Social Security checks.
"I really do believe it is time to forgive the rest of my loan," she said. "I have more than paid off the principal."
Some commenters said private student loans were merely a symptom of a larger problem: runaway tuition costs, and the diminishing value of a college degree in such a lackluster job market.
"You (the CFPB) should study the outrageous costs of higher education, the value received and the impact on students," one borrower wrote.
"Private lenders are more customer-focused and responsive," she added. Federal "loan representatives that I've spoken with (when you eventually get through to a person) are less than friendly, borderline rude, have no incentive to focus on the consumer or my needs or issues."
