The Consumer Financial Protection Bereau will now be taking complaints from students on private loan problems.
The CFPB will help students with paying back private loans and dealing with debt collectors.
In the fourth quarter of 2011 consumer debt was at $11.530 trillion, student loan debt has now surpassed credit card debt with eight percent student loans and six percent credit cards.
Students are turning to private loans when their federal loan options run out.
One of the problems with private loans is that they don’t have the same amount of protection as federal loans including military deferments, discharges upon death and income-based repayment plans.
Before the CFPB took over, private loans were only regulated by a patch work of state and federal authorities.
Now, Rohit Chopra the ombudsman for the bureau will be handling complaints and giving recommendations to congress on what they can do to regulate the situation.
“The ability to work hard and better yourself through education is part of what makes this country so great,” said Richard Cordray, Director of the CFPB. “But getting a higher education can mean taking on significant debt – a big decision with a lot of consequences. The CFPB is now the one-stop federal agency where all private student loan borrowers can ask questions, get information, and file a complaint about this important market.”
The CFPB has been taking complaints on consumer financial products and services since its launch July 21, 2011. The bureau got its start by taking complaints on credit cards and eventually moved on to covering mortgages and other home loans.