- “The CFPB received more than 3,100 private student loan complaints between October 1, 2014, and March 31, 2015, a 34% increase over the prior reporting period. The CFPB also received approximately 1,100 debt collection complaints related to student loans during this period.
- Many private student lenders advertise options to release a co-signer from a private student loan. However, lenders’ and servicers’ policies related to this benefit are often opaque and may create significant roadblocks for borrowers seeking to release a co- signer. Most lenders and servicers generally do not proactively notify borrowers when they may be eligible. Consequently, the overwhelming majority of private student loan borrowers in our sample did not apply for a co-signer release. Of those who did apply, the rejection rate was 90%, on a weighted average basis.
- Borrowers submitted complaints to the CFPB noting that private student loan companies rejected their application for a co-signer release because they had previously accepted the servicers’ offer of postponing payment through forbearance. These company policies can permanently ban a consumer from seeking co-signer release for the life of the loan…”
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