The latest annual report from the Consumer Financial Protection Bureau contains a clear message for borrowers encountering problems with loan servicers: Complain. More specifically, file a complaint with the CFPB.
“Complaints by student loan borrowers led to hundreds of millions of dollars in relief and important market reforms,” said CFPB Director Richard Cordray, in a statement.
“When borrowers are empowered to stand up for themselves, they can shape policy and spur government to take action,” said Seth Frotman, CFPB student loan ombudsman, in the same statement.
For example, complaints by members of the military led to enforcement actions by the Justice Department, and FDIC halted illegal practices at one large student loan servicer and returned more than $60 million to 77,000 service members in 2014. The coordinated agency work ultimately saved 100,000 military borrowers more than $20 million in student loan interest charges since 2016, according to the CFPB.
Complaints by borrowers about loan servicing practices that delayed or deterred access to promised payment relief led to stronger contractual requirements for four loan servicers handling federal student loans, including the requirement that servicers proactively communicate with student loan borrowers who submit incomplete IDR applications.
“Complaints and robust oversight can move the market to mitigate risk of unanticipated borrower harm through consumer-driven reforms to product features,” according to the CFPB Annual Report.
In its latest annual report, the CFPB writes it received approximately 22,000 complaints from student loan borrowers between Sept. 1, 2016 and Aug. 31, 2017 — more than double the number of last year — including 12,900 concerning federal student loan servicing and 2,300 concerning collection of private and federal loan debt.