The Consumer Financial Protection Bureau (CFPB) today published a series of new procedures and guidelines it will use for examining student loan lenders. The new protocols, known as the Student Lending Examination Procedures, will be used as a guide by CFPB officials to ensure that private student lenders are compliant with federal consumer protection laws.
Quizzologists break it down for you.
According to the new procedures, private lenders must:
- Use accurate, non-discriminatory advertising and marketing
- Make appropriate disclosures about loan costs and terms of the loan.
- Provide borrowers with regular and accurate account information on payment requirements, charges, fees, and any changes in interest rates
- Handle inquiries, complaints, and disputes from borrowers in a timely fashion
(Read the full Student Lending Examination Procedures here.)
The CFPB has statutory authority to supervise banks and non-banks that extend private student loans—these new requirements will be used to examine the lenders to make sure their practices don’t adversely affect borrowers.
In announcing the new regulations, CFPB Director Richard Cordray said, “with student debt topping a trillion dollars, we will be working to ensure consumers are treated fairly and lenders are held accountable.”
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CFPB Planning More Measures
In addition to these new procedures, the CFPB has recently published comprehensive reports on the current state of the student loan marketplace, the Annual Report of the CFPB Student Loan Ombudsman on private student loan complaints and grievances, and The Next Front, which is concerned with student loans taken out by military families.
Beyond all that, the CFPB is also developing a whole host of other consumer protection-related programs, including:
- Guides for families entering the student loan market and managing personal finances while pursuing higher education
- A comparison tool to help families and students weigh different financial aid offers from different schools
- A web tool designed to help educate student borrowers on loan repayment options
So, if you’re preparing for college, be sure to take advantage of all the latest options and information at your disposal.
That way, you’ll have confidence that you’re picking the right loan—whether offered through government or private lenders—and that you can pay it off in a reasonable amount of time after graduation.