CFPB Report on Private Student Loans Urges Changes to Co-Signer Release Process
Sharon Edmondson, Washington Legislative Team Member | June 19, 2015
The Consumer Financial Protection Bureau (CFPB) voiced alarm about the number of borrowers who are being rejected for a co-signer release on private student loans and wants lenders and servicers to clarify their policies and decision making procedures. A review of industry information and consumer complaints found that 90 percent of the applications to release parents or other co-signers from private student loans are rejected. Although many private student lenders advertise release options the specific criteria for obtaining those releases are often hard to find and difficult to understand. Officials at the CFPB believe consumers are often “left in the dark” about why a request for a co-signer release was rejected.