Private student loan borrowers face surprise, confusion upon graduation, report suggests
College students who take out private student loans to pay for school are often surprised by the terms of their loans once they graduate, according to a new Consumer Financial Protection Bureau report.
The bureau's student loan ombudsman released the annual report Monday.
The report outlines complaints made to the agency by private student loan borrowers.
Among other issues, borrowers reported having trouble understanding how much they owed and being unable to find out who owns a loan once it's been sold.
Rohit Chopra, the bureau's student loan ombudsman, said the report was based on anecdotal data, and wasn't intended to be statistically significant.
The report is based on an analysis of about 2,900 private student loan complaints, comments and other submissions from borrowers.
Terms can be difficult
Unlike federal student loans, private loans don't offer protections like income-based repayment plans, discharges upon death or military deferments.
That lack of protection left many borrowers in a difficult position when they graduated and weren't able to make payments, Chopra said.
Borrowers can't refinance or modify those loans, he said, so borrowers who made partial payments still found themselves in default.
According to the report, about 95 percent of the complaints had to do with the servicing of the loans.
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