Consumer Financial Protection Bureau looks to address private student loan repayment
Federal consumer protection officials are looking for options to make private student loans easier to repay. The federal Consumer Financial Protection Bureau announced plans Thursday to find ways for policymakers to make it easier for struggling borrowers to repay loans.
Thousands in default
In July, the bureau and the U.S. Department of Education released a joint report on the issue of private student loans. The market for private student loans in the mid-2000s was marked by aggressive marketing and relatively lax consumer protection standards, much like the market for subprime mortgages, according to the report.
According to the study, about 850,000 student loans are in default, with balances totaling more than $8 billion. Even more loans are in delinquency, according to the report.
The bureau released a second report in October outlining complaints made to the agency by private student loan borrowers. Among other issues, borrowers reported having trouble understanding how much they owed and being unable to find out who owns a loan once it's been sold.
Chopra said he hoped to see that report serve as the first step in a more comprehensive review of the private student loan industry.