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Student Loans: The Impact

Joint Statement of Principles on Student Loan Servicing: The Consumer Financial Protection Bureau (CFPB), Department of Education, and Department of Treasury call for uniform standards for all student loan borrowers in their Principles on Student Loan Servicing. The CFPB is also considering a broad student loan servicing rulemaking to provide stronger consumer protections for all student loan borrowers.

Gainful Employment rule: The Department of Education finalized its Gainful Employment rule in 2014 to restrict federal financial aid from flowing to career education programs that do not lead to good job opportunities and wages for student loan borrowers. These programs, which are largely offered by for-profit colleges, must ensure that the education student borrowers protects them from high default rates or high levels of debt relative to earnings.

Enforcement actions against for-profit colleges: State Attorneys General and federal regulators have undertaken a variety of investigations and enforcement actions against for-profit colleges for fraudulent job placement claims, poor educational quality and outcomes, predatory private loan programs, and questionable marketing tactics.

Student accounts offered through bank-school partnerships: Many colleges market accounts or prepaid cards to students through exclusive partnerships with banks. While students may get the convenience of a student ID that also serves as a debit card, these accounts often come with expensive overdraft fees that can strip away needed financial aid funds. The Department of Education is considering a rule that would curb overdraft fees on these co-branded accounts.

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