A new?study done by NerdWallet has found?that the most common complaints concerning student loan debt includes difficulty when confronted with a lender and the inability to repay financing.
A system to record complaints coping with private student education loans was first placed in 2011 by the Consumer Financial Protection Bureau, the government watchdog for consumer lending options and services. ?For the study, NerdWallet checked out 5,000 of these complaints which were filed using the bureau this past year and made available to the public through the Consumer Complaint Database.
The most typical complaint made in 2015 concerning student loan debt was found to deal with difficulty when it came time to communicate with a lender or servicer, with a total of 2,779 complaints. ?Lenders and servicers differ for the reason that while a lender owns and issues money to some borrower, a servicer is paid by a lender to handle loan payments.
Within this topic?were a number of more specific complaints. ?One-third of these related to?\”trouble with how payments are handled.\” ?In most, one out of every five complaints suggested that borrowers were given “bad information” pertaining to a loan. ?Other specific complaints received included problems with customer service at 17%, issues with fees charged at 14%, receiving multiple phone calls about a loan at 10%, and 9% said they were in need of additional information pertaining to a loan balance or the loan.
The second most common complaint was discovered to be not being able to pay back financing, with 1,580 complaints about this subject being made by consumers in 2015. ?Of the group, 43% reported not being able to receive flexible payment options, while another 40% said they were not allowed to reduce their monthly obligations. ?The remaining 17% said they could not temporarily postpone payments. ?Not being able to pay loans may cause borrowers to go into default. ?This is especially found within the private student loan market, where default can occur as quickly as 3 months after a missed payment. ?Once in default, a borrower will get a court-ordered judgement which in turn can lead to wage garnishment.
According to MeasureOne, which measures data on private student loans, the number of complaints produced in 2015 was considered to be “minimal.” ?However, researchers believe this may be due to not many people realizing there is place for these to lodge a complaint.
The goal of the complaint system is to not only record complaints, but also to, when appropriate, find a way to fix the issue. ?All complaints are sent through the CFPB to the companies for response. ?Individual companies then have 15 days to reply before the complaint is made available to the general public. ?Although facts alleged within complaints are not verified by the bureau, it will say they?\”take steps to confirm a commercial relationship between the consumer and the company.\”
In total, 97% of complaints received were taken care of immediately by companies within the 15-day window. ?However, receiving a response does not mean a resolution has been found that satisfies both company and also the customer.