WASHINGTON (2/22/13)--Credit unions and other lenders, educators and borrowers can now help the Consumer Financial Protection Bureau develop recommendations on how the student lending market can be improved.
The CFPB said it is gathering information from the public to develop options for policymakers to make repayment of private student loans more manageable for struggling borrowers. The CFPB in a release noted that private student loan borrowers who wish to pay their loans, but face high payments, lack alternative repayment and refinance options.
"Too many private student loan borrowers are struggling with unwieldy debt that prevents them from climbing the economic ladder… 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," CFPB Director Richard Cordray said.
The CFPB suggested commenters could discuss:
- How student loan burdens might impact the broader economy and hinder access to mortgage credit and automobile loans;
- How distressed borrowers manage their student loan obligations;
- What options currently exist for borrowers to lower their monthly payments on private student loans; and
- The most effective mechanisms for communicating with distressed borrowers.
Commenters could also provide examples of successful alternate payment programs in other markets, and address how those examples can be tailored to treat student lending issues, the CFPB said.
The CFPB plans to accept comments until April 8. For more on the CFPB project, use the resource link.
The CFPB has noted that student loan debt, which surpassed $1 trillion in 2012, has exceeded credit card debt as the largest source of consumer debt in the U.S. More than $150 billion of this $1 trillion total is comprised of private student loans, and at least $8 billion of these private student loans are in default, the CFPB said.
CUNA estimates that around 300 credit unions currently offer student loans to their members. Credit unions also provide financial education and seminars relating to student lending generally, and encourage students to attend. The CUStudentLoans.org
website also provides extensive financial education regarding student lending, through both written information and webinars.
The site is powered by Fynanz, a CUNA Strategic Services provider.