It’s no secret that student loan debt is a growing problem in the U.S. Recent data from the Consumer Financial Protection Bureau (CFPB) indicates total outstanding student loans are approaching $1.2 trillion, with $165 billion of that in the form of private, not federally backed, student loans. The Project On Student Debt estimates that two thirds of 2011 graduates had debt averaging $26,600; and that one third of graduates had private loans averaging $12,550.
If the numbers aren’t bad enough, a recent report (.pdf file) from the CFPB paints an even uglier picture. After analyzing 3,800 consumer complaints sent to the consumer organization, the CFPB found that the private student loan industry is rife with problems: borrowers reported difficulty doing everything from verifying a payment was properly applied to receiving the correct payoff balance.