Which Companies Had the Most Student Loan Complaints in 2021?

There are greater than 43.5 million scholar mortgage debtors in the US, making it one of many largest forms of shopper debt—solely second to mortgage loans. Scholar mortgage debtors owed a complete of $1.77 trillion in scholar mortgage debt by the top of the third quarter of 2022. The typical steadiness held per borrower as of the top of June 2022 was $38,000.

That is some huge cash to should pay again. However it may be a saving grace when you’ll be able to’t afford the rising price of training. Though being accepted for a scholar mortgage is step one, it’s possible you’ll discover some hiccups along with your scholar mortgage supplier. This text seems to be on the corporations with probably the most scholar mortgage complaints filed with the Client Monetary Safety Bureau (CFPB) and will assist information you earlier than you really apply.


Key Takeaways

  • A scholar mortgage is a type of debt used to pay for education-related bills.
  • The Client Monetary Safety Bureau compiles an annual listing of shopper complaints obtained by scholar mortgage suppliers.
  • The CFPB obtained 5,300 complaints about scholar loans between September 2020 and August 2021.
  • AES/PHEAA was the lender with probably the most complaints about federal scholar loans.
  • Navient was the lender with probably the most complaints about non-public scholar loans.

Scholar Mortgage Fundamentals

One of the crucial necessary issues individuals want to contemplate earlier than making use of for school is how they anticipate to pay for it. Some persons are fortunate sufficient to afford to pay for his or her training upfront. However that is not the case for everybody. Many households plan forward by opening a school financial savings plan whereas others work their manner by way of faculty to pay tuition charges and associated bills. However even with these choices, many college-goers nonetheless want a monetary enhance. This implies they could have to show to scholar loans.

A scholar mortgage is a kind of debt people take out to assist pay for the prices related to training—usually larger training. This contains undergraduate and graduate research, doctorates, medical and dental faculty, and others. Scholar loans can be utilized to pay for tuition, housing, charges, and different associated bills.

Loans fall into two completely different classes: federal and personal. Federal scholar loans are administered by the U.S. Division of Schooling. Qualifying for certainly one of these loans requires finishing an software. That is known as the Free Software for Federal Scholar Help (FAFSA).

Mortgage eligibility and approval are primarily based on private circumstances and monetary info for candidates and their households. Non-public loans, then again, are issued by non-public lenders equivalent to banks and credit score unions, along with different monetary establishments. Whereas federal loans are primarily based on monetary want and advantage, non-public loans are primarily based on credit score historical past. Rates of interest additionally differ between the 2. Whereas federal loans are likely to have decrease charges, non-public lenders usually cost debtors a lot larger charges.

The CFPB Report

The Client Monetary Safety Bureau collects complaints from most people about monetary services and products. These complaints are put right into a database, revealed, and despatched to the corporate. Complaints are divided by product and repair right into a database, which shoppers might entry at any time.

Scholar mortgage complaints are filtered by way of an ombudsman to assist present debtors with help. These complaints are compiled right into a report revealed by the company yearly. This report is shipped to a number of committees in addition to the next people:

  • The Secretary of the Treasury
  • The Secretary of Schooling
  • The CFPB’s director

The ninth annual report was revealed in October 2021. The knowledge compiled into the report was collected between Sept 1, 2020, to Aug. 31, 2021. A complete of 5,300 complaints have been lodged with the company, the place 3,414, or 64%, have been positioned in opposition to federal mortgage suppliers, whereas 1,923, or 36%, have been in opposition to non-public mortgage suppliers.

Scholar Mortgage Complaints

Shoppers recognized the next points as being probably the most troublesome when it got here to their scholar mortgage suppliers:

  • Coping with lenders or suppliers. The primary criticism underneath this class was that individuals mentioned they obtained unhealthy details about their loans. This was adopted by bother with how funds are dealt with. The third criticism was issues coping with customer support.
  • Difficulties repaying scholar loans. The primary criticism underneath this part is that debtors really feel they cannot get versatile compensation choices. The second-most-common criticism underneath this class was that lenders did not permit debtors to delay making funds briefly. The third class was issues debtors encountered making an attempt to decrease their month-to-month funds.
  • Issues associated to debtors’ credit score experiences or scores. Debtors complained about incorrect account statuses. The second largest criticism was that lenders did not repair errors on the debtors’ credit score experiences. The third-largest criticism was about incorrect account info.

These have been the businesses with probably the most complaints about non-public scholar loans:

Firm Title Variety of Complaints
Navient 459
SLM Company 168
Nelnet 147
Wells Fargo 87
Supply: Annual Report of the CFPB Non-public Schooling Mortgage Ombudsman

California was the state with the very best variety of complaints for personal college students loans, with a complete of 196 complaints, adopted by:

  • Texas: 149 complaints
  • Florida: 130 complaints
  • New York: 119 complaints
  • New Jersey: 84 complaints

You may submit a criticism about your scholar mortgage or different monetary product/service on to the CFPB by way of its web site.

The next corporations had probably the most complaints about federal scholar loans:

Firm Title Variety of Complaints
Navient 718
Nelnet 356
Heartland Cost 27
Supply: Annual Report of the CFPB Non-public Schooling Mortgage Ombudsman

As soon as once more, California had the very best variety of complaints registered for federal scholar loans with a complete of 334. This was adopted by:

  • New York: 243 complaints
  • Florida: 227 complaints
  • Texas: 216 complaints
  • Pennsylvania: 181 complaints

Particular Issues

The CFPB database receives complaints about many alternative monetary services and products. Solely 0.6% of those complaints have been associated to scholar loans in 2021, which fell close to the center of the pack. The primary criticism lodged by shoppers was associated to credit score or shopper reporting (68.8%), whereas debt assortment got here in second at 12.9% of the full variety of complaints. Checking or financial savings complaints ranked third at 4.2% of the full variety of complaints.

World Pandemic

The affect of the worldwide COVID-19 pandemic have to be thought-about relative to this report. The federal authorities supplied some reduction to federal scholar mortgage debtors by way of the Coronavirus Help, Aid, and Financial Safety (CARES) Act. As an example, debtors of sure federal scholar loans certified for non permanent cost reduction underneath the act, with funds initially halted till Sept. 31, 2020.

The deadline has been prolonged a number of occasions since then. The White Home introduced that the scholar mortgage cost pause could be prolonged till the sooner of those two dates:

  1. 60 days after the division is permitted to implement the Biden mortgage forgiveness program, which is at present held up in courts, or the litigation is resolved; or
  2. 60 days after June 30, 2023.

Those that qualify and proceed to pay are eligible to obtain a 0% rate of interest, permitting them to pay their debt off a lot sooner. Collections are stopped for individuals who are in default throughout this era.

Though these provisions do not lengthen to personal loans, many non-public lenders proceed to supply some monetary reduction to their debtors by making lodging equivalent to cost deferrals and different preparations.

Can I Sue My Scholar Mortgage Servicer?

Typically, you’ll be able to sue your scholar mortgage servicer as a borrower; nonetheless, if there’s a class-action lawsuit in opposition to your supplier or faculty, you mechanically develop into part of the class-action lawsuit, however usually are not instantly suing any celebration. If the lawsuit is set in favor of the suing celebration, then you’ll share within the awarded quantity. You may file a separate lawsuit by yourself relying on the precise state of affairs.

How Do I Complain About Scholar Mortgage Forgiveness?

To complain about scholar mortgage forgiveness, you’ve got just a few choices. The very best place to start out is submitting a criticism along with your scholar mortgage supplier, both by cellphone, on-line, or e mail. You may additionally file a criticism with the Client Monetary Safety Bureau and the U.S. Division of Schooling. The contact info is supplied on their web sites.

What Group Oversees Scholar Loans?

The group that oversees federal scholar loans is the workplace of Federal Scholar Help. Non-public scholar loans are overseen by the non-public lender that issued the mortgage.

The Backside Line

Utilizing the knowledge above can assist you higher put together your self earlier than you begin to fill out your scholar mortgage functions. However do not forget that this could function only a information. You do not have to remove a lender as a result of it seems on the listing. Base your choice in your private state of affairs.