The Center for Responsible Lending applauds the CFPB for its continued focus on student loan servicing. Good loan servicing benefits both the borrower and the lender by helping borrowers successfully pay down their loans. As the CFPB holds a field hearing on student loan servicing today in Milwaukee, we offer seven ideas for a fair student loan servicing system: Prevent default by identifying at-risk borrowers and taking aggressive steps to enroll them in income-based repayment plans or providing other loan modifications Re-enrollment should be as simple as possible Fair allocations of...
Student loans create debt burdens that impact families for generations. Black Americans in general, and Black and Latina women in particular -- often are forced to take on more college debt than their white counterparts in pursuit of the American Dream. The student debt burden is felt most acutely by attendees of Historically Black Colleges and Universities. CRL successfully led a coalition of advocates that achieved substantial student debt cancellation in 2022. We continue to advocate for higher education policies to protect student loan borrowers and their parents from falling into a cycle of debt that keeps them from engaging in wealth-building activities.
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When colleges and banks team up to market bank accounts to students, protecting students' loan funds may take last place in the deal. Instead of helping students find the best account for them, these deals may push students into accounts with high overdraft fees and other harmful features. CRL research shows that overdraft fees alone on these accounts may reach over $700 year – more than the price of textbooks. The Department of Education has the opportunity to protect student loan dollars from overdraft fees in an upcoming cash management rulemaking. But there is no need to wait for a rule...
In this letter to Consumer Financial Protection Bureau Director Richard Cordray the Center for Responsible Lending and the National Consumer Law Center respond to the agency's Request for Information about the Student Safe Account Scorecard , which would guide colleges to select safe bank accounts if they enter into marketing partnerships with banks. In the letter, the two organizations support the Scorecard as a way to help protect students, and call for: An end to college-bank partnerships that threaten students with unfair marketing practices and harmful fees The elimination of revenue...
Fifteen consumer, student, civil rights, and legal aid groups co-signed a letter to Consumer Financial Protection Bureau Director Richard Cordray in response to the agency's Request for Information about the Student Safe Account Scorecard. The organizations supported the Scorecard and stated: Colleges and universities must begin to put the best interest of students first when negotiation with banks and prepaid card issuers The Student Safe Account Scorecard is a voluntary tool for schools to use in their bidding process with financial institutions The Scorecard would help schools select safe...
Fifteen student, consumer, civil rights, and labor groups co-signed a letter (4 pages) in support of the Consumer Financial Protection Bureau's proposed rule on prepaid cards. The groups suggest that the new rule would support similar actions by the Department of Education, aimed to protect students using prepaid cards. The groups state: College students are a key segment of the prepaid market – but prepaid cards lack essential consumer protections Exclusive revenue-sharing and other marketing agreements between colleges and prepaid card issues exacerbate the lack of consumer protections...
Some colleges and banks enter into exclusive agreements to offer students checking accounts – usually these accounts come furnished with a debit card that prominently displays the school logo and can sometimes be used as student ID. For banks, these exclusive agreements mean a captive audience for their bank products (checking accounts, credit card accounts) and usually a customer for life. Studies suggest that banks are a "sticky" product – once a consumer chooses one, they're unlikely to change. For colleges, these exclusive agreements mean increased revenue. These partnerships may include...
The letter states... On August 20, 2014, the Department received a joint memorandum from the American Bankers Association (ABA) and Consumer Bankers Association (CBA),1 arguing that the Department did not have authority under Title IV of the Higher Education Act (HEA) to promulgate rules on campus banking products of the scope proposed during negotiated rulemaking in spring 2014. The ABA's analysis is incomplete, superficial, and incorrect. It should not disturb the Department's rulemaking efforts. Download the entire letter. (PDF)
Dear Secretary Duncan, Attorney General Holder, and Director Cordray: As advocates for students, veterans, consumers, civil rights and college access, we write to express grave concerns about the proposed sale of 56 Corinthian Colleges campuses to ECMC Group, a debt collector and loan servicer. We urge you not to waive liability for any prospective buyer of Corinthian campuses unless the sale provides significant relief for current and former students and contains enforceable safeguards to protect students and taxpayers from future abuse. Last year, the publicly traded Corinthian Colleges Inc...
Senior Policy Council Maura Dundon submitted testimony to the Department of Education on its 2015 rulemaking agenda.