Sound off on student loan servicing
A few weeks ago, we announced that we’re gathering information about student loan servicers — the companies responsible for collecting and processing student loan payments. Although student loans are usually thought of as a younger American issue, in reality there are an increasing number of older Americans paying back student loan debt. Many older consumers struggle with student loan debt, sometimes forcing them to delay retirement or threatening their financial security when in retirement.
Older consumers may hold student loan debt because they are still paying off loans that were: (1) accrued when they were much younger, (2) acquired during the course of a mid- or late-career switch, or (3) taken out for the education of their children or grandchildren.
According to a recent Government Accountability Office report, here are some concerning trends about older consumers and student loan debt:
- Between 2005 and 2013, outstanding federal student loan debt owed by older borrowers grew from less than $3 billion to more than $18 billion, more than a six-fold increase.
- Delinquency rates for older borrowers doubled between 2005 and 2012, rising from 6 to 12.5 percent.
- Older borrowers defaulted on federal loans at much higher rates than other borrowers. More than a quarter of federal loans owed by borrowers ages 65-74 are in default. For borrowers 75 years or older, more than half of outstanding federal loans are in default.
- The number of older consumers whose social security benefits were offset for the collection of federal student loan debt increased nearly 400 percent from 2002 through 2013. For consumers 65 or older the increase was roughly 500 percent.
Many older consumers who have submitted complaints to the Bureau about student loans report being billed for loans they never borrowed, receiving harassing and abusive debt collection calls, being wrongly charged fees because of the servicer’s accounting errors, and having their credit rating impacted by incorrect reporting of student loan information.
We now want to hear from you. If you’ve had problems with student loan debt or run into repayment roadblocks, share your story. Here are just a few things you can tell us about:
- Disclosure, accessibility, and availability of options to release a co-signer from their legal obligation to repay a co-signed student loan;
- Disclosure, accessibility, and availability of options to discharge or reduce student loan debt in the event of the death or disability of a borrower or co-signer;
- Processing, allocation, and application of loan payments;
- The imposition and disclosure of late fees;
- The complaint resolution process (including how allegations of fraud are resolved); and
- Furnishing of credit information to credit reporting agencies.
To share your story for the public record, go to regulations.gov or click this link to send us an email. Please don’t include sensitive information like account numbers and social security numbers. Submit your input and ideas by July 13, 2015. Having trouble with a link in this blog post? You can also submit an official comment online.
If you experience any problem with a student loan, you can submit a complaint to the CFPB. We’ll forward your complaint to the company and work to get a response from them. Visit consumerfinance.gov/complaint or call us at (855) 411-2372.
If you have any questions, please don’t hesitate to contact the Office for Older Americans at, email@example.com.