Private student loan borrowers face surprise, confusion upon graduation, report suggests

by Silas Allen Modified: October 15, 2012 at 8:28 pm •  Published: October 16, 2012
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Those included complaints about billing, deferment, fraud and credit reporting.

Many of those complaints came from borrowers who ran into roadblocks when they tried to repay their loans, Chopra said.

In many cases, he said, borrowers reported that payments left their bank accounts but weren't credited against their loan accounts in a timely fashion.

Similar to home loans

Earlier this year, the bureau and the U.S. Department of Education released a joint report on the issue of private student loans.

According to that report, the market for private student loans in the mid-2000s was marked by aggressive marketing and relatively lax consumer protection standards, much like the market for subprime mortgages.

Chopra emphasized that similarity again Tuesday, saying the frustration and confusion private student loan borrowers face is similar to that of home loan borrowers who seek loan modifications in the hopes of staying in their homes.

Chopra said he hopes to see the report serve as the first step in a more comprehensive review of private student loans.

More work will be needed to understand what policymakers can do to help solve the situation, he said.


by Silas Allen
General Assignment/Breaking News Reporter
Silas Allen is a news reporter for The Oklahoman. He is a Missouri native and a 2008 graduate of the University of Missouri.
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