“The CFPB received more than 2,300 private student loan complaints and more than 1,300 debt collection complaints related to student loans between October 1, 2013, and March 31, 2014.  This mid-year update discusses specific co-signer issues reported by borrowers. Approximately 90% of private student loans were co-signed in 2011. Many private student lenders advertise an option to release a borrower’s co-signer after a certain period of time of on-time payments. Complaints from private student loan borrowers describe the obstacles they face when seeking to obtain these releases. In addition, complaints indicate that borrowers often have to apply for a release, but lenders and servicers generally do not make the criteria for co-signer release clear and transparent. Many private student loan contracts include an option for lenders to demand the full balance of a loan when a borrower’s co-signer has died or filed for bankruptcy.  Complaints from private student loan borrowers suggest that industry participants are automatically placing loans in default – even when a borrower is paying as agreed.  The report describes potential alternatives to “auto-defaults” upon co-signer death and bankruptcy, including assessing the borrower for co-signer release and maintaining the existing payment schedule, providing the opportunity to identify a new co-signer (such as the spouse of the deceased parent), or providing time to refinance the loan.”