CFPB call on student loan complaints today
Oct. 18, 2013 – Credit unions are invited to participate in a CFPB briefing call today on its second annual report on student loan complaints – which includes tips on how to pay off loans faster.
CFPB Assistant Director and Student Loan Ombudsman Rohit Chopra will host the call at 2 p.m. Eastern today, to discuss both the report and the bureau’s consumer advisory for student loan borrowers.
Credit unions that wish to participate in the call should RSVP by e-mailing the participant’s name and affiliation to Students@cfpb.gov with the subject “10/18 Call.”
The report includes data on the complaints the bureau received about student loans: it received 3,800 private student loan complaints in total, and 87 percent of the complaints were directed at eight companies, none of which are credit unions.
NAFCU is monitoring the call. In response to the report, NAFCU Regulatory Affairs Counsel PJ Hoffman said the data was not surprising, and showed that credit unions are the “gold standard in the private student lending industry.”
The report focuses on private student lenders’ and loan servicers’ payment processing policies, and warns that allowing the servicers to decide what to do with extra money – payments in excess of the amount due at any given time – can be dangerous. The advisory explains that servicers must listen to specific instructions from borrowers looking to pay down their debt more quickly.
“If you direct any extra money to your highest interest rate loan first, you may save hundreds of dollars or more in extra interest payments and you may be able to get out of debt faster,” the advisory said. The bureau provides a sample letter of instructions for borrowers to send in order to make sure excess payments are being used the way they intend.