WASHINGTON — Late last year, a newly formed agency designed to protect consumers in the financial marketplace asked student loan borrowers to write in about their experiences with private student loans.
The Consumer Financial Protection Bureau got an earful: almost 2,000 comments from student loan borrowers, higher education organizations, nonprofit lenders and banks arrived over the next six months. The thousands of pages of comments, most submitted through the bureau’s website, paint a picture of borrowers confused by the student loan marketplace, struggling with high levels of debt and pleading for help from the government.
The complaints aren’t new: indebted borrowers have told similar stories online and in the media for months, as student debt rose first to the forefront of the Occupy movement, then began to play a role in the campaign for the White House. But the comments to the Consumer Financial Protection Bureau, unlike those on blogs and petitions about debt forgiveness, are addressed to a government agency that has said it wants to address some of the concerns through regulations.
Still, the comments don’t provide a clear picture of what, if anything, the bureau, charged with compiling a report to Congress on the state of the private student lending industry, might recommend in response.
The majority of borrowers who wrote to the agency said they have tens of thousands of dollars' — if not six figures' — worth of debt, either because they borrowed large amounts to attend college or because the interest on their private loans has capitalized over time. In comments ranging from a few short sentences to long paragraphs, borrowers of all ages told of similar situations: taking out federal and private loans to attend college, then discovering that their monthly payments were in the hundreds of dollars and jobs were hard to find.
Click through for full article content.