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Category Archives: Student Loans

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CFPB announces higher education memorandum of understanding

Posted in Military Issues, Student Loans

The CFPB announced that it has entered into a “Joint Higher Education Memorandum of Understanding” with the Departments of Veterans Affairs (VA), Defense (DOD), and Education (ED) as part of a joint effort by the agencies “to prevent abusive and deceptive recruiting practices by schools serving servicemembers, veterans, spouses and other family members.”  The MOU… More >

Media reports on student loan debt: distortions abound

Posted in Student Loans

Two recent articles highlight how student loan debt is often the subject of distorted reporting.  An article from Hamilton Place Strategies observed that news stories often include anecdotal stories about families burdened by student debt.  After examining about 100 articles with such stories over a three month period, the authors found that the new stories… More >

New studies challenge CFPB claims that student loan debt is discouraging homeownership

Posted in Student Loans

The charge that student loan debt is causing young adults to postpone home ownership has come from various quarters, including the CFPB.   However, two new studies, one the subject of an article released earlier this year and the other the subject of a Brookings Institution report released this week, suggest those charges are overblown.  The… More >

Obama takes action to increase assistance to student borrowers

Posted in Student Loans

President Obama issued a Presidential Memorandum last Monday directing the Secretary of Education to issue regulations that allow additional students to take advantage of a program to cap their student loan payments at 10 percent of their income and to improve communication about that option and existing student loan repayment options. According to the White… More >

Senator Hagan Introduces the Servicemember Higher Education Protection Act

Posted in Military Issues, Student Loans

New legislation, titled the Servicemember Higher Education Protection Act (the “Bill”), was introduced recently by Senator Kay Hagan (D-NC).  The Bill includes several provisions that expand protections under the Servicemembers Civil Relief Act (SCRA) with respect to student loans.     The Bill would amend the SCRA to expand the available interest rate limitation for student… More >

Student Loan Refinancing Bill Stalled in Senate

Posted in Student Loans

Late last week, the student loan refinancing bill introduced by Senator Warren (D-MA) came up 4 votes short of the 60 needed to end debate and prevent a filibuster.  If enacted, S. 2292, the Bank on Students Emergency Loan Refinancing Act, would establish separate refinancing programs for federal and private student loans.  It would generally… More >

Senate holds hearings on student loans

Posted in Student Loans

Last Wednesday, the Senate Budget Committee and the Senate Banking Committee held separate hearings about student loans.  Interestingly, the CFPB was represented in only one of the hearings. The Senate Budget Committee held a hearing titled “The Impact of Student Loan Debt on Borrowers and the Economy,” which included testimony from the CFPB’s Student Loan… More >

Senate to hold two hearings on student loan issues

Posted in Student Loans

On Wednesday, June 4, the Senate Budget Committee will hold a hearing titled “The Impact of Student Loan Debt on Borrowers and the Economy.” The Committee will hear from the following witnesses: Rohit Chopra, Student Loan Ombudsman, Consumer Financial Protection Bureau Brittany Jones, Recent College Graduate and Former President, Student Virginia Education Association Richard Vedder,… More >

Cordray Discusses Student Loans at Boulder Summer Conference on Consumer Financial Decision Making

Posted in CFPB General, Richard Cordray, Student Loans

Director Cordray spoke at the Boulder Summer Conference on Consumer Financial Decision Making this week, addressing student loan debt as a “pressing problem and a matter of grave importance to public policy in America.” Student loan debt is the second largest debt category after the mortgage market, and has reached $1.2 trillion. According to Director… More >

DOE rulemaking on student aid disbursement reported to be stalled

Posted in Student Loans

As we reported last month, the Department of Education (DOE), with active CFPB participation, is currently engaged in a negotiated rulemaking process that is considering, among other things, revisions to the DOE’s Title IV’s cash management rules (34 CFR 668, Subpart K), including those relating to acceptable methods of disbursement of eligible Title IV funds… More >

Did the CFPB, DOJ, and ED Just Amend the Servicemembers Civil Relief Act?

Posted in CFPB General, Military Issues, Student Loans

Yesterday, as a result of a referral from the Consumer Financial Protection Bureau, the Department of Justice and the Department of Education announced a $60 million settlement against a major student loan servicer for failing to reduce the interest rates on loans to servicemembers to 6 percent, when allegedly required to do so by the… More >

For-profit education company sued by CFPB seeks dismissal of complaint

Posted in CFPB Enforcement, Student Loans

ITT Educational Services, the defendant in the CFPB’s first enforcement action against a for-profit education company, has filed a motion seeking dismissal of the CFPB’s complaint.  Filed this past February in an Indiana federal court, the CFPB’s complaint accused ITT of violating the Dodd-Frank ban on unfair, deceptive, or abusive practices (UDAAP) by misleading borrowers… More >

Elizabeth Warren and other congressional members urge rulemaking by the Department of Education re: regulating college/bank partnerships for debit/prepaid cards for student aid disbursement

Posted in Debit Cards, Prepaid Cards, Student Loans

On April 22nd, Senator Warren, nine other Senators, and 14 members of Congress sent a letter (the “Letter”) to Secretary of Education Duncan urging that the Department of Education (DOE) exercise its rulemaking authority to regulate, limit or outright ban certain practices when colleges enter into agreements with financial providers to offer debit cards, prepaid… More >

CFPB student loan complaints report highlights alleged co-signer issues

Posted in Student Loans

The CFPB’s Student Loan Ombudsman has released a report entitled “Mid-year update on student loan complaints” that highlights issues related to co-signers of private student loans. In particular, the report focuses on “obstacles” faced by borrowers in obtaining co-signer releases and automatic defaults that occur upon a co-signer’s death or bankruptcy. The CFPB reports that… More >

CFPB promotes online student financial aid resources

Posted in Student Loans

In a new blog post , the CFPB promotes its online financial aid resources to students who are now in the process of choosing which school to attend this fall.  The blog post directs students to a just-launched “crisp new version of our Paying for College tool kit,” stating that “[m]aking apples-to-apples comparison of your… More >

CFPB issues second report on servicemember complaints

Posted in Military Issues, Payday Lending, Student Loans

Earlier this month, the CFPB issued a press release describing its second snapshot report of complaints from military consumers.  The report details complaints the CFPB has received from servicemembers, veterans, and their families and the measures it has taken in response.  Between July 2011 and January 2014, the CFPB has received approximately 14,000 complaints, handling more than 250 complaints… More >

CFPB files enforcement action against for-profit education company over alleged predatory lending tactics

Posted in Student Loans

After hinting for months that it intends to use its enforcement powers to police lending in the higher education arena, the CFPB dropped the hammer on ITT Educational Services, filing suit against the for-profit college over alleged predatory lending practices. On February 26, the CFPB filed a complaint against ITT in the Southern District of… More >

CFPB supervision of student loan servicers to begin March 1

Posted in Student Loans

Later this week, on March 1, the CFPB’s final rule defining larger participants of the student loan servicer market becomes effective.   We expect the CFPB to immediately begin examining entities that qualify as larger participants.  Under the rule, the CFPB can supervise servicing of private and federal student loans by any nonbank entity that qualifies… More >

CFPB issues findings on handling of extra payments by private student loan servicers

Posted in Student Loans

In November 2013, the CFPB sent a letter to private student loan servicers asking them for information about their practices for handling extra payments from borrowers (i.e., payments in excess of the minimum amount due).  In a letter dated February 3, 2014, Rohit Chopra, the CFPB’s Student Loan Ombudsman, presented the CFPB’s findings based on the… More >

Federal agencies launch new servicemember higher education complaint process

Posted in Student Loans

Servicemembers now have more channels for submitting complaints relating to their higher education.  In addition to their ability to submit complaints about student loans via the CFPB’s complaint system, servicemembers using Post 9/11 GI Bill and other military education benefits for higher education can use a new online complaint system announced by several federal agencies,… More >

A numbers game?

Posted in Student Loans

In written testimony for his appearance before the House Financial Services Committee yesterday, CFPB Director Cordray advised that the CFPB has received “thousands of student loan complaints.”  When we sorted the student loan complaints in the CFPB complaint data base, we came up with 5,993 complaints.  That might sound like a lot but it’s worth… More >

CFPB continues push for more private student loan refinancings

Posted in Student Loans

Private student loan lenders and servicers who met last week with CFPB Director Cordray, Education Secretary Arne Duncan, and Acting Deputy Treasury Secretary Mary Miller got the “memo” that the regulators think they should be doing more to expand refinancing opportunities for  private student loan borrowers.  The meeting was the subject of a blog post… More >