Which Companies Had the Most Student Loan Complaints in 2020?

Which Companies Had the Most Student Loan Complaints in 2020?

There are greater than 45 million student loan debtors within the United States, making it one of many largest sorts of client debt—solely second to mortgage loans. Student loan debtors owed a complete of $1.677 trillion in student loan debt by the top of the second quarter of 2020. The common steadiness held per borrower as of June 2020 was $37,000, whereas Forbes reported the common graduate of the category of 2018 was $29,200. 

That’s some huge cash to should pay again. But it may be a saving grace when you possibly can’t afford the rising price of schooling. Although being authorized for a student loan could also be a godsend, you could discover some hiccups together with your student loan supplier. This article appears to be like on the firms with essentially the most student loan complaints filed with the Consumer Financial Protection Bureau (CFPB) and should assist information you earlier than you really apply.

Key Takeaways

  • A student loan is a type of debt used to pay for education-related bills.
  • The Consumer Financial Protection Bureau compiles an annual checklist of client complaints obtained by student loan suppliers.
  • The CFPB obtained nearly 7,000 complaints between September 2019 and August 2020.
  • AES/PHEAA was the lender with essentially the most complaints about federal student loans.
  • Navient had essentially the most complaints about personal student loans.

Student Loan Basics

One of a very powerful issues folks want to contemplate earlier than making use of for school is how they count on to pay for it. Some persons are fortunate sufficient to afford to pay for his or her schooling upfront. But that is not the case for everybody. Many households plan forward by opening a university financial savings plan whereas others work their manner by way of faculty to pay tuition charges and associated bills. But even with these choices, the vast majority of college-goers nonetheless want a monetary enhance. This means they might have to show to student loans.

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A student loan is a sort of debt people take out to assist pay for the prices related to schooling—usually greater schooling. This consists of undergraduate and graduate research, doctorates, medical and dental faculty, and others. Student loans can be utilized to pay for tuition, housing, charges, and different associated bills.

Loans fall into two totally different classes: Federal and personal. Federal student loans are administered by the U.S. Department of Education. Qualifying for certainly one of these loans requires finishing an software. This is named the Free Application for Federal Student Aid (FAFSA).

Loan eligibility and approval is predicated on private circumstances and monetary info for candidates and their households. Private loans, then again, are issued by personal lenders equivalent to banks and credit unions, in addition to different monetary establishments. While federal loans are based mostly on monetary want and benefit, personal loans are based mostly on credit historical past. Interest charges additionally differ between the 2. While federal loans are likely to have decrease charges, personal lenders typically cost debtors a lot greater charges.

The CFPB Report

The Consumer Financial Protection Bureau collects complaints from most people about monetary services. These complaints are put right into a database, printed, and despatched to the corporate. Complaints are divided by product and repair right into a database, which customers might entry at any time.

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

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

The eighth annual report was printed in October 2020. The info compiled into the report was collected between Sept. 1, 2019, to Aug. 31, 2020. A complete of 6,950 complaints have been lodged with the company, the place 5,014 or 72% have been positioned towards federal loan suppliers, whereas 1,936 or 28% have been towards personal loan suppliers.

Student Loan Complaints

Consumers recognized the next points as being essentially the most troublesome when it got here to their student loan suppliers:

  • Dealing with lenders or suppliers. The primary grievance underneath this class was that folks mentioned they obtained unhealthy details about their loans. This was adopted by hassle with how funds are dealt with. The third grievance was that debtors do not agree with the charges charged by the lender.
  • Difficulties repaying student loans. The primary grievance underneath this part is that debtors really feel they cannot get versatile compensation choices. The second class was issues debtors encountered making an attempt to decrease their month-to-month funds. The third commonest grievance underneath this class was that lenders did not permit debtors to delay making funds briefly.
  • Problems associated to debtors’ credit reviews or scores. Borrowers complained that lenders did not repair errors on their credit reviews. The second and third largest complaints have been about incorrect account statuses and incorrect account info.

These have been the businesses with essentially the most complaints about federal student loans:

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Company Name Number of Complaints
AES/PHEAA 1,208
Navient  1,143
Nelnet 496
Premier Student Loan Center  66
Great Lakes 51
Source: Annual Report of the CFPB Private Education Loan Ombudsman

California had the very best quantity, with a complete of 475 complaints, adopted by:

  • Texas: 356 complaints
  • Florida: 332 complaints
  • New York: 327 complaints
  • Georgia: 225 complaints

You can submit a grievance about your student loan or different monetary product/service on to the CFPB by way of its web site.

The following firms had essentially the most complaints about personal student loans:

Company Name Number of Complaints
Navient 676
Sallie Mae 145
AES/PHEAA 133
Nelnet 84
Discover Bank 76
Source: Annual Report of the CFPB Private Education Loan Ombudsman

Once once more, California had the very best variety of complaints registered for personal student loans with a complete of 238. This was adopted by:

  • Texas: 135 complaints
  • New York: 130 complaints
  • Florida: 121 complaints
  • Pennsylvania: 98 complaints

Special Considerations

The CFPB database receives complaints about many alternative monetary services. Only 1.6% of those complaints have been associated to student loans, which fell close to the center of the pack. The primary grievance lodged by customers was associated to credit or client reporting (52.9%), whereas debt assortment got here in second at 17.3% of the whole variety of complaints. Credit card complaints ranked third at 7.7% of the whole variety of complaints.

Global Pandemic

There is one essential consideration to notice about this specific report—the worldwide COVID-19 pandemic. The federal authorities supplied some reduction to federal student loan debtors by way of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. For occasion, debtors of sure federal student loans qualify for momentary fee reduction underneath the act.

This implies that funds for individuals who qualify are halted till Dec. 31, 2020. Those who qualify and proceed to pay are eligible to obtain a 0% rate of interest, permitting them to pay their debt off a lot sooner. Collection calls are stopped for individuals who are in default throughout this era.

Although these provisions do not prolong to non-public loans, many personal lenders proceed to offer some monetary reduction to their debtors by making lodging equivalent to fee deferrals and different preparations.

The Bottom Line

Using the data above may also help you higher put together your self earlier than you begin to fill out your student loan functions. But keep in mind that this could function only a information. So do not eradicate a lender as a result of it seems on the checklist. Base your choice in your private scenario.

Investopedia requires writers to make use of main sources to help their work. These embody white papers, authorities information, authentic reporting, and interviews with trade consultants. We additionally reference authentic analysis from different respected publishers the place acceptable. You can be taught extra in regards to the requirements we observe in producing correct, unbiased content material in our
editorial coverage.
  1. Forbes. “Student Loan Debt Statistics in 2020: A Record $1.6 Trillion.” Accessed Nov. 8, 2020.

  2. Consumer Financial Protection Bureau. “Annual Report of the CFPB Private Education Loan Ombudsman.” Accessed Nov. 8, 2020.

  3. Federal Trade Commission: Consumer Information. “If you have federal student loans, read this.” Accessed Nov. 8, 2020.

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