Last week, student loan borrowers (your very own Student Loan Ranger included) received some exciting news when the Consumer Finance Protection Bureau announced, "Our student loan complaint system is open for business."
We are thrilled the CFPB has begun to exercise its oversight authority regarding student loans. We're also wondering whether using the phrase "open for business" was a clever play on words or inadvertent satire, given popular opinion on the student loan business. We're leaning toward the former since we're loving what the Bureau has been doing so far.
What have they been doing exactly? The CFPB is the first federal agency solely focused on consumer financial protection, and it began operations in July 2011. Many of their major initiatives focus on banking, credit cards, mortgages, and student loans.
Since we are the Student Loan Ranger, let's talk about the fun things the Bureau is doing in the student loan wilderness.
While we've discussed on a number of occasions the borrower protections attached to federal loans, a protection we haven't mentioned often is the fact that there is a Federal Student Loan Ombudsman Group to which you can turn to seek help and guidance or to lodge complaints regarding your federal loans.
[See what's coming for federal graduate student loans.]
But where, in the past, could you turn for your private student loans? Now you can turn to the CFPB, home to the recently created private student loan ombudsman, who will assist borrowers and review complaints (not just comments, but actual complaints lodged against your lender or servicer).
The new ombudsman, Rohit Chopra, will also examine these complaints to develop recommendations to Congress and federal agencies. Remember when we encouraged you to share your private loan stories with the CFPB? We were eager to see the beginnings of some relief for private loan borrowers! (By the way, they are analyzing thousands of submissions to include in a report later this year.)
[Find out why private loan borrowers need increased protections.]
And now, not only can you continue to share your stories, you can file a complaint about your experience, either by going online or by calling 1-855-411-CFPB. The Bureau will work with your lender or servicer to get a response. (They expect a response within 15 days and expect complaints to be closed in 60 days.)
You'll be able to track the status of your complaint after you submit it. You can also submit complaints regarding federal student loans, which the Bureau will direct to the Department of Education.
The types of complaints the Bureau anticipates include:
• Difficulties making full payment
• Confusing advertising or marketing terms
• Billing disputes
• Deferment and forbearance issues
• Debt collection and credit reporting problems
But overseeing complaints is not all the Bureau has been up to. We recently gave you a brief rundown of the first round of comments in the Know Before You Owe Financial Aid Shopping Sheet released by the CFPB and the Department of Education.
We also want to remind you about the CFPB's Student Debt Repayment Assistant. We mentioned this tool in November and want to emphasize how important it is to know about your options for repaying your student loans, including important ways that can help you stay out of default if you are having trouble paying your loans. The tool is easy to understand and is great for getting you pointed in the right direction.
At the Student Loan Ranger, we also work hard to help you get off to a good start and to keep you informed about your options and changes in the student "loan-iverse."
To learn more about educational debt relief like Public Service Loan Forgiveness and Income-Based Repayment, and new developments including President Obama's Pay As You Earn proposal and Special Direct Consolidation, register for one of our free student debt relief webinars. The next one is Friday, March 16 at 3 p.m. EST. And stay updated on student debt news by connecting with us on Twitter (@EJW_org #studentdebthelp) and Facebook.
In the meantime, let us know what you think about the CFPB's progress so far by commenting below.
Radhika Singh Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. In 2008, she served on the Student Loans Team in the Negotiated Rulemaking for the College Cost Reduction and Access Act (CCRAA) and has extensive knowledge of this landmark educational debt relief legislation. Radhika graduated from Loyola Law School Los Angeles. Prior to joining Equal Justice Works, she was a staff attorney at the Partnership for Civil Justice, focusing on constitutional and civil rights litigation and advocacy.