New Effort Underway to Tackle Student Loan Debt
Saturday, February 23, 2013
Not surprisingly, experts in and out of education all have opinions on how to reform the system, particularly for those students struggling to keep up with the rising costs of private loans.
And that’s exactly what the Consumer Financial Protection Bureau (CFPB) wants to hear.
In an announcement this week, the organization at the heart of a congressional game of tug-of-war announced that it is looking for input on how to best help borrowers of private student loans find more options as they attempt to keep up with their payments.
The CFPB is inviting members of the public, as well as those inside the process—be it financial institutions, colleges and universities, housing finance experts or students themselves—to offer their suggestions through their website from now until April 8 and will make the information gathered public soon after that deadline.
The Notice and Request for Information is available by clicking here.
The organization said change is necessary, particularly because private borrowers often don’t have the same protections and options as those students who go through the government to afford their education.
The news was met with quick approval by the members of Rhode Island’s Congressional Delegation, who all called the matter critical to the Ocean State’s success both now and in the future.
“I applaud the Consumer Financial Protection Bureau for taking these proactive steps to address the student loan debt that is holding back our youth just as they are trying to become contributing members of the workforce," said Congressman Jim Langevin. "This type of initiative is exactly the reason we created the Bureau as part of the Wall Street Reform law. It was designed to give the middle class a fair chance, whether it’s by helping them finance college or homeownership, or ensuring they get fair treatment from credit card companies.”
“With our nation’s total student-loan debt now over $1 trillion, we must take steps to relieve the financial burden on our students and graduates,” Senator Sheldon Whitehouse said. “I’m fighting to pass legislation that will give Americans struggling to get out from under unmanageable student loan debt the same bankruptcy protections available to other borrowers. I look forward to hearing additional recommendations from the CFPB.”
Senator Jack Reed, meanwhile, feels this type of initiative shows exactly what Congress needs to end its political game in confirming a director for the organization, which has taken center stage nationwide as Republicans in the
US Capitol fight to block the appointment of Richard Cordray.
“This is another example of the importance of having a fully operational CFPB with a confirmed director,” Reed said. “The private student loan market has been largely unregulated and offers few of the protections that are part of the federal student loan programs.”
Cordray said his organization is tackling the issue as a matter of economic recovery.
“Too many private student loan borrowers are struggling with unwieldy debt that prevents them from climbing the economic ladder,” he said. “We will be analyzing plans for policymakers to consider that might help avoid a repeat of the mortgage meltdown for today’s student loan borrowers.”
Reed says he is “encouraged” by the CFPB’s attempt to bring the problem to the forefront nationally.
“Student loan debt is not just a burden for individuals at the launch of their careers but also represents a real drag on our economy,” he said. “Current borrowers need relief from unmanageable payments and future borrowers need security and protection from predatory practices.”
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