CFPB Unveils Model Disclosures for Student Loans
October 26, 2011
The Consumer Financial Protection Bureau has introduced a student loan
disclosure model meant to assist college students in comparing financial aid
packages. Created by the CFPB and the Department of Education, the financial aid
disclosure would make the costs and risk of student loans clear to the borrower
while outlining a student's estimated debt and monthly loan payments after
graduation. While student loans are considered a great resource to help students
reach their goals, the actual risks need to be clear to parents and students,
according to Raj Date, special adviser to the Treasury Secretary for the CFPB.
"Having a simple, one-page financial aid shopping sheet would help students
compare offers and choose the one that's right for them," he stated. The form
will list the cost of attending college, tuition, fees, and other related
expenses. Additionally, it includes clear distinctions between scholarships and
loans. While the new agency has the authority to make significant changes to
many financial practices, it cannot address all issues until it has a permanent
director. The CFPB also released a student debt repayment assistance tool that
provides information on income-based repayment, deferments, and alternative
payment programs for borrowers who may be struggling to repay their student
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