The Bureau saw an increase in complaints about private student loans this year. Altogether, there were 5,300 private student loan complaints, up 38 percent from last year. Despite receiving thousands of complaints, the CFPB was able to identify common threads in the experiences of the student loan borrowers. Many of the borrowers who reached out to CFPB noted their struggle with repaying their private student loans. Other common complaints included a lack of flexibility and options regarding repayments when a borrower is unable to repay a loan.
Hosts Molly Adams and Brian Babylon had a roundtable discussion with intern Tony Buitrago and his sister Katie Buitrago about the growing student debt crisis in America, which has quadrupled in the last ten years to over 1.2 trillion dollars. Katie happens to be the Sr. Policy and Communications Associate at the Woodstock Institute, a nonprofit organization that advocates action against unethical practices of for-profit colleges when it comes to student loans.
The CFPB was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act as the first federal financial regulator whose focus is protecting the rights of consumers.
No matter who you are—a credit card borrower, student borrower, homeowner, servicemember, or more—the CFPB is making major strides to ensure that you can safely do business with financial institutions.
When potential students search online with terms such as “become a police officer in Chicago” or “state trooper college,” a link to Westwood’s criminal justice program pops up near the top of the results. Many students reasonably believe that a Westwood degree would be a foot in the door at the Chicago Police Department or the Illinois State Police.
Often students leave these schools with high debt loads, even though their employment prospects may be no better than before. This means they may not be able to repay their student loans, save for emergencies, buy a house, or improve their economic opportunities.
The CFPB alleges that ITT, which educates tens of thousands of students in over 40 states, is steering students into high-interest private student loans in order to afford ITT’s expensive price tag. While ITT students use federal student loans to fund the majority of their education, private student loans play an important role in covering the gap between the cost of attendance and federal loans.
Private loans have no limits on>interest rates and few repayment plans, unlike federal loans, for which income based repayment is available to borrowers.
Among the bill's protections:
The Consumer Financial Protection Bureau (CFPB) recently asked the public for ideas on how to promote loan affordability for private student loan borrowers, especially in periods of hardship.