http://chronicle.com/article/Most-Complained-About-Private/142611/
October 24, 2013
Most Complained-About Private Lenders Are Listed in New Report
By Andy Thomason
Ten lenders are involved in about 90 percent of all consumer complaints to the Consumer Financial Protection Bureau about private student loans, according to a report released on Thursday. The report, compiled by the U.S. Public Interest Research Group, synthesizes thousands of complaints on private student lending.
The most complained-about lender was Sallie Mae, though its 46-percent share of complaints was less than its hulking market share of roughly 50 percent. The Pennsylvania Higher Education Assistance Authority was second in complaints, followed by Wells Fargo, which is second only to Sallie Mae in market share.
The report echoes the findings of another report, issued last week by the bureau's student-loan ombudsman, in stating that a lender's share of complaints closely tracks its market share.
The report is based on more than 4,300 complaints made from March 2012, when the bureau began collecting statistics on private student lending, to August 6. The breadth of the report speaks to the utility of the bureau's method of collecting complaints, said Christine Lindstrom, higher-education program director for the group.
The bureau's public, searchable complaint database, Ms. Lindstrom wrote in an e-mail, "blows any other complaints systems out of the water," including the U.S. Department of Education's.
According to the report, the bureau has helped about 8 percent of complainants to receive monetary relief from their lender. About 12 percent of complainants had their complaints resolved through nonmonetary relief, the report states. Repayment was the subject of roughly 65 percent of all complaints.
The report also suggests ways for the bureau to improve the system, including by adding more narrative information about specific cases, developing a smartphone app to inform consumers how to use the complaint system, and undertaking analyses of trends more often.
Private student loans made up roughly 7 percent of all student loans taken out last year, while representing 15 percent of the United States' outstanding student-loan debt.
