Annual Report of the CFPB Student Loan Ombudsman, October 16, 2012: “The Dodd-Frank Wall Street Reform and Consumer Protection Act established an ombudsman within the Consumer Financial Protection Bureau. Pursuant to the Act, the ombudsman shall prepare an annual report and make appropriate recommendations to the Secretary of the Treasury, the Director of the Consumer Financial Protection Bureau, the Secretary of Education, and Congress. This report is the first annual report meeting the requirement set forth in the Act…Outstanding student loan debt is now over $1 trillion, with private student loans accounting for more than $150 billion. There are at least $8 billion of private student loans in default, representing more than 850,000 individual loans. Private student loans are issued by banks and credit unions, state-affiliated and non-profit agencies, schools, and other financial companies. Like in the mortgage market, creditors often employ third party servicers to collect payments from private student loan borrowers. Many of these servicers are also active in the federal student loan market.”
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