The student loan ombudsman at the Consumer Financial Protection Bureau (CFPB) published another iteration of their annual report Wednesday, highlighting a continued decrease in complaints related to private or federal student loans, a trend first documented in 2017.
Over the course of one year, from Sept. 1, 2019, through Aug. 31, 2020, CFPB handled approximately 7,000 complaints related to private or federal student loans. Of that total, 1,900 were private student loan complaints, representing a decrease of roughly 33% compared to the previous year’s report. The remaining approximate 5,000 complaints were related to federal student loans, marking a decrease of roughly 24% compared to the previous year’s report.
As a followup to the current ombudsman’s first annual report released in 2019 — the agency failed to produce one in 2018 as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act — the agency does not attribute the decrease in complaints to a single factor, but instead points to a number of policies and resources to account for the trend, such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act as a contributor to decreases documented since March of 2020.
Specifically, CFPB cited 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 as indicators for the improving trend.
The report also contains a number of recommendations for policymakers to consider going forward, as the coronavirus pandemic continues to impact borrowers and lawmakers sort through a potential aid package.
“Policy makers may wish to consider whether any extensions beyond December 31, 2020, should be event-driven, time-driven, or a hybrid of both,” the report suggests among its top concluding recommendations. “Event-driven duration may rely on various economic data and indicators appropriate to the circumstances that may trigger relief starting and ending, while a time-driven duration provides known start and stop times. A hybrid approach may combine the predictability of a time driven approach with the flexibility of an event driven approach.”
Publication Date: 10/30/2020