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Private Student Loan Ombudsman To The Rescue!

If you’ve got a major problem with a federal student loan, you can rest somewhat easier knowing you’ve got a guardian angel. Thanks to Congress, you’ve got someone on your side for private student loans as well.

As a consumer protection lawyer I’m wary of the banking industry. Not to say I dislike all bankers, it’s just that the industry as a whole is so complex it feels like the deck’s always stacked against real people.

I like the fact that federal student loan problems can be tackled not only on your own but also through the ombudsman. What most people don’t realize is that there’s a private student loan ombudsman as well.

Origin Of The Private Student Loan Ombudsman

Until recently, private student lenders were regulated by a patchwork of state and federal authorities. With no federal supervisory program over private student loan lenders, consumer protection regulations were nearly impossible to navigate.

The Dodd-Frank Wall Street Report And Consumer Protection Act of 2010 created a private education loan ombudsman so that borrowers of private education loans could get the same dispute resolution process as for federal loans.

The Role Of The Private Student Loan Ombudsman

The keys to the supervision of private student loans have been handed over to the Consumer Finance Protection Bureau. The ombudsman, Rohit Chopra, is responsible for helping borrowers resolve complaints and develop recommendations to Congress and other federal government agencies.

Among the types complaints that the CFPB handles are:

  • Difficulties making full payment;
  • Confusing advertising or marketing terms;
  • Billing disputes;
  • Deferment and forbearance issues; and
  • Debt collection and credit reporting problems.

How To File A Private Student Loan Complaint

If you’ve got a complaint involving your private student loan, you can:

  • Call the toll-free phone number at 1-855-411-CFPB (2372)
  • Visit online at www.consumerfinance.gov
  • Fax the CFPB at 1-855-237-2392
  • Mail a letter to P.O. Box 4503, Iowa City, Iowa 52244

according to the CFPB, financial institutions are expected to respond to complaints within 15 days with the steps they have or plan to take. Borrowers have the option to dispute the lender’s proposed resolution to the problem.

Have you filed a complaint with the CFPB about a private student loan? I’d love to hear about your experiences.

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By |July 19th, 2012|

About the Author:

I’ve been a consumer protection lawyer since 1995, working to help people end their bill problems. I’m a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

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