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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.
by Silas Allen Modified: February 21, 2013 at 9:56 pm •  Published: February 22, 2013

“Federal student loans remain the best option for borrowers, but we know some students have turned to private student loans and are struggling to repay,” Duncan said.

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.

by Silas Allen
General Assignment/Breaking News Reporter
Silas Allen is a news reporter for The Oklahoman. He is a Missouri native and a 2008 graduate of the University of Missouri.
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