The decline in complaints it received related to private or federal student loans from Sept. 1, 2019, to Aug. 31, 2020, continued a trend from 2017 but is not likely attributable to just one factor, the Consumer Financial Protection Bureau’s (CFPB) private education loan ombudsman said in that office’s 2020 annual report.
From Sept. 1, 2019, through Aug. 31, 2020, the bureau reported handling approximately 7,000 complaints related to private or federal student loans. For private student loans, the bureau said that in the year ending Aug. 31, 2020, it handled approximately 1,900 complaints, down about 33% compared with the previous year. For federal student loans, it said it handled about 5,000 complaints, down about 24% compared with the previous year.
The bureau cited several factors that may have contributed to these declines. It said the relief provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) likely contributed “significantly” to the decrease since March 20, but that didn’t account for the steady decline in complaints before that.
“Though no single factor may be responsible for the decrease, and it is difficult to quantify and assign attribution between and among potential factors, the following factors may have contributed to the overall decrease: 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,” the bureau said. It also said companies provided timely responses to 99% of the complaints.
In addition to student loan complaints, the report notes approximately 1,700 debt collection complaints related to private or student loan during the report period; and about 500 complaints mentioning COVID-19.
Student loan complaints made up about 1.6% of the 447,300 complaints received by the bureau during the year ending Aug. 31, 2020, the report shows.
Annual Report of the CFPB Private Education Loan Ombudsman 2020