Washington — Crushed by record levels of student loan debt and hindered by a lackluster economy, borrowers of private student loans say they are being given the runaround when they seek to negotiate repayment plans or to refinance their loans.
That is one of the key findings of a report being released today by the newly-created Consumer Financial Protection Bureau (CFPB).
“By far, the most common concern communicated by borrowers has been the difficulty negotiating a repayment plan with their servicer in periods of unemployment, underemployment or financial hardship,” states the annual report of the CFPB ombudsman, which is being submitted today to Congress, U.S. Secretary of Education Arne Duncan and U.S. Secretary of the Treasury Timothy Geithner.
“Many borrowers report frustration that they are unable to identify appropriate personnel that can make a determination about their repayment options,” the report states.
Student loan borrowers have also reported inability to refinance loans at lower rates.
“We have heard from borrowers who say they are looking for loans with more attractive terms, but many have been unable to take advantage of today’s historically low rates,” the report states.
Rohit Chopra, the student loan ombudsman at the CFPB, said the report represents a preliminary look at problems being faced by borrowers of private student loans, but that more information is needed in order to develop specific policy solutions.
