State AGs now are being solicited by the Consumer Financial Protection Bureau (CFPB) for information regarding borrower complaints about private student loan lending as part of the CFPB’s recent increased scrutiny into this area. Last week the CFPB issued a notice in the Federal Register and wrote to State AGs, colleges, universities, and consumer advocacy groups to seek information regarding borrower complaints about private education loans. The CFPB and State AGs often collaborate on consumer protection issues—the National Association of Attorneys General has a Consumer Financial Protection Bureau Working Group for this very purpose.
Until recently, students with federal student loans could direct their complaints to the Department of Education’s Federal Student Aid Ombudsman, but there was no single government agency charged with overseeing private student loans. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB now has an Ombudsman for private student loans who is responsible for providing assistance to borrowers of private educational loans. As part of this new mission, a few months ago the CFPB launched a student loan complaint system to help borrowers resolve issues with their student loans. Since that launch, the agency has received thousands of complaints, which it published just last week.