"With student debt topping $1.2 trillion, there’s increasing focus on what happens to people after they take on loans, particularly borrowers who are struggling to make their payments," Bloomberg Businessweek reports.
"The Consumer Financial Protection Bureau is about to begin overseeing the seven largest student loan servicers. Now four Senate Democrats—Illinois’s Dick Durbin, Massachusetts’s Elizabeth Warren, California’s Barbara Boxer, and Rhode Island’s Jack Reed—have introduced legislation proposing a bill of rights for borrowers.
The press release focuses on the “rights” the legislation will give borrowers, but the full bill, which Durbin’s office provided because it isn’t on the government’s website yet, shows there’s more tucked into the 46-page document (PDF). Here’s how it breaks down:
The first nine pages aren’t actually the “Bill of Rights” at all. Instead, they’re a set of new proposed regulations for servicing private student loans, which make up about 14 percent of outstanding debts (and an even smaller share of new loans). Much of the section is devoted to spelling out requirements for how servicers must advise struggling borrowers about long-term options such as consolidating loans into lower rates and different repayment plans. (If a borrower indicates that her problem is short-term, the servicers can suggest forbearance or deferment options.) Interestingly, it directs the CFPB to create a model disclosure form that servicers must then use to present repayment options."
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 12/16/2013