NASFAA Voices Strong Support for CFPB Private Student Loan Recommendations
National Association of Student Financial Aid Administrators (NASFAA) President Justin Draeger issued the following statement in response to the recommendations put forth by the Consumer Financial Protection Bureau's (CFPB's) report on private student loans. These recommendations will be delivered to Congress and incorporate several policies advocated by NASFAA and the National Association of College and University Business Officers (NACUBO), including:
- Allowing private student loans to be discharged in bankruptcy like other forms of consumer debt;
- Excluding Department of Health and Human Service (HHS) student loans from Truth in Lending Act (TILA) requirements for private student loans to help students and parents distinguish between federal and private loans;
- Requiring private student loans to be certified by the higher education institution;
- Setting up a database -- similar to the National Student Loan System (NSLDS) -- for private student loans to help students track and repay their loans.
"Financial aid administrators commend the CFPB for proposing recommendations that would help students and parents borrow responsibly and repay their loans," said NASFAA President Justin Draeger. "If enacted, these recommendations would help ensure students and parents receive counseling before borrowing private student loans, avoid confusing private loans with some federal loans, and provide them tools to better track and repay their loans. In addition, adopting these recommendations would give trapped borrowers a pathway back to prosperity for those who may find themselves trapped in a non-dischargable student loan abyss.We urge Congress to consider and enact these recommendations immediately."