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COLUMBIA -- Student and consumer groups in Missouri met today with officials from the Consumer Financial Protection Bureau’s Office of Students to discuss how the agency helps to keep college, and college loans, affordable for students.
“I was shocked to learn all the ways that student loan borrowers can end up paying even more than they should for their education,” said Sean Earl, President of the Missouri Students Association, and meeting attendee.
Over 60 percent of Missouri’s college graduates carry student loan debt, which averages $27,480.
Resources that the consumer protection agency makes available for students to help them pay their loans include:
- For borrowers facing difficulty in repayment, the agency’s Payback Playbook, launched in 2016, can give individualized details to a student loan borrower for a number of loan repayment options, producing numbers on expected monthly payment and accrued interest for the life of the loan.
- For those who can afford to make additional payments each month, CFPB provides a ‘sample instructions’ template for borrowers to communicate with their servicer about how to allocate that extra money.
- The agency has an entire “Tackling Student Loan Debt” guide dedicated to veterans and service members who have special rights, protections, and resources available when borrowing money to pay for college.
- The CFPB hosts a Consumer Complaints database which allows consumers to input their complaints. It has taken in 3,900 complaints from student loan borrowers over the past five years, sending them out to banks, loan servicers, financial firms, and for-profit colleges for response, and ideally, resolution.
The problems that cause student loan debt are many, and are made worse when student loan borrowers encounter tricks in their financial products or are exposed to predatory lending tactics, debt relief scams, and more. The CFPB takes enforcement action against banks, for-profit colleges, and financial firms when they engage in illegal activities toward student loan borrowers. For instance, it has sued Student Aid Institute, Inc., College Education Services, and Student Loan Processing US, for deceptive advertising and charging illegal fees to borrowers who were behind on their payments and sought ‘debt relief.’
“Even as the economy improves, student loan borrowers continue to struggle,” noted Katie Steen, higher education advocate for the Missouri Public Interest Research Group, citing recently released data showing that 1.1 million student borrowers defaulted on their loans in 2016.
Cara Spencer, executive director of Consumer s Council of Missouri, said “Most Missouri college students need loans to pay for higher education” says Cara Spencer of the Consumers Council of Missouri "and we need an agency like the CFPB to crack down on predatory loan repayment products and scams that make student loan borrowers vulnerable for years after graduation.”
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