Private student loans account for $150 billion of the $1 trillion in total student loan debt in the country, according to the first annual report from the Consumer Financial Protection Bureau's student loan ombudsman.
The report found that many loan servicers -- the companies that collect the payments -- make it extremely difficult for student borrowers to manage their debts. Borrowers often have trouble finding out how much they owe or getting information about their payment histories. Slipshod loan servicing makes private student loans even riskier by increasing the chance that people will fall behind on payments.
The federal government needs to open up refinancing and debt relief opportunities for these people, as it did for some mortgage holders. And borrowers who might be eligible for federal loans should be advised to examine that option before plunging headlong into private debt.