The biggest complaints about private student loans (MoneyWatch) Of the more than $1 trillion dollars Americans owe in student loan debt, $150 billion of it is in private student loans. Private student debt is the scariest type because borrowers don't enjoy the same protections as they do with federal student loans. A report released this week by the federal Consumer Financial Protection Bureau documents the challenges that these borrowers are facing as they struggle to repay their loans. The CFPB's first-ever annual report is based on roughly 2,900 complaints that the bureau, which was created under the 2010 Dodd-Frank financial reform law, received in the seven months since it started soliciting them. Unresponsive lenders By far, the most common complaints (65 percent) came from borrowers who complained about the difficulty of negotiating a repayment plan with their loan servicers during periods when they lacked a job, were underemployed or experiencing financial hardship. Borrowers also expressed frustration that private lenders often rebuff their efforts to refinance their private loan debt even when they had graduated from college, built a credit profile and earned income. This can be exasperating because students' lack of credit history can result in high interest rates for private loans. Thirty percent of the complaints came from borrowers who experienced problems when they could not afford their payments. These included difficulties with default, debt collection tactics and lack of a bankruptcy alternative. The bureau suggests that Congress should explore ways that would allow borrowers to modify their private loans. Private lenders can alter loans, but they have no financial incentive to do so. Except on rare occasions, student loans can't be discharged in bankruptcy. Sallie Mae: complaint target One thing students who need to borrow money to attend college can do is, before turning to a private lender, max out their federal student loans. The best loan for students is the federal Stafford Loan. When private loans are a necessity, students and their parents need to shop wisely. Eighty-seven percent of all student loan complaints came from seven lenders, according to the bureau. That isn't surprising because the pool of lenders is highly concentrated. What should give potential borrowers concern, however, is that one lender -- Sallie Mae - generated 46 percent of the complaints. Better private student loan source If you need to use private loans, it's also advisable to check with community banks and credit unions. The report noted that the bureau received very few complaints about these institutions. "Increased participation by small financial institutions might benefit the market," the bureau stated. I wrote a post earlier this year about credit unions refinancing student debt. You can learn more about borrowing for college through credit unions at CUStudentLoans.org, which offers private consolidation student loans. Borrowers with outstanding student loans also should check out the CFPB's website, which offers a suite of consumer tools that provides borrowers with information on how to identify a payment plan, determine what loans they have and how to get out of default.