WASHINGTON The Consumer Financial Protection Bureau says students are being harmed by the practices of the major student loan servicers.
A study of 3,800 complaints submitted to the CFPB found that when students try to make extra payments to get out from under high-interest private loans, they often find their efforts thwarted by servicers. The study also found that struggling borrowers are often ignored when they ask for adjustments from their servicers.
"I'm concerned the same chaos we saw in the mortgage market may be repeating itself in the student loan market," CFPB student loan ombudsman Rohit Chopra said in releasing the report. He said some of the same regulatory solutions that cleaned up the mortgage market could be employed to smooth out kinks in the student loan market.
The vast majority of complaints were of the major servicers, Sallie Mae; American Education Services/PHEA; Wells Fargo; Discover and JP Morgan Chase.
Even though private student loans is a rapidly growing business for credit unions there were no credit unions listed in the study.
