Latest CFPB Effort to Improve Things for Student Loan Borrowers: “Payback Playbook”
Student loan borrowers struggle mightily to get information tailored to our specific circumstances. Ever get a form letter from your student loan servicer that left you scratching your head? Advocates at the Consumer Financial Protection Bureau (CFPB) are working to improve the way loan servicers communicate with us about our loans with the goal of giving consumers real-time, up-to-date information about our repayment options. The CFPB has released new Payback Playbook prototypes (say that six times fast) and they want our feedback.…
Student loan servicers screwing 30 percent more troops and counting
When will the loan servicers stop the nonsense? Why isn't the Department of Education holding their feet to the fire? Consider this. The Department of Justice (Justice, not Education), documented that Sallie Mae has been overcharging interest to active duty members of the military since 2005, in violation of the servicemembers Civil Relief Act (SCRA). According to the Federal Deposit Insurance Corporation (FDIC), Sallie Mae also illegally maximized borrower’s late fees and misrepresented how borrowers…
Three Cheers for Rohit Chopra, CFPB Student Loan Ombudsman!
Hip hip! Hooray! Rohit Chopra stood up for student loan borrowers during his four-year tenure as the first ever Consumer Financial Protection Bureau's Student Loan Ombudsman. I thank you, Mr. Chopra. The Chronicle of Higher Education reports that Mr. Chopra will step down from his post next week. In his resignation letter, Mr. Chopra wrote, "I am proud of the progress that we have made together to assist borrowers, promote transparency, and hold accountable those who break the law. While more…
REPAYE “targets benefits”
The negotiated rulemaking committe reached agreement on a new repayment option, called REPAYE, expected to become available at the end of 2015. I'll be writing lots more about this, but for now I'll start by just listing the provisions I consider pluses and minuses for student loan borrowers. Just can't wait to learn more? Read the proposal here but bear in mind that the next step is for the Department of Education to publish the language that was agreed upon (it's not quite the same), likely…
Who Will Benefit from the Expansion of Pay As You Earn (PAYE)?
Negotiated rulemaking, affectionately referred to as Neg Reg, is underway! Committee members met to discuss a proposed agenda, and the Department of Education will release the committee’s final agenda before they reconvene on March 31st. Over three months the negotiators will discuss, among other things, how to implement the President’s directive to expand Pay As You Earn to five million additional borrowers by the end of this calendar year. The Department of Education has proposed creating a new plan, PAYE2, for Direct Loan borrowers…
