A new report to Congress on the private student loan market tells a story that by now is familiar: complaints from borrowers about repayments, servicing and bankruptcy, and comparisons to the mortgage markets. The report, the second this year from the recently established Consumer Financial Protection Bureau, urges Congress to act to improve student loan servicing and provide private student loan borrowers with more flexibility.
The consumer protection bureau has focused on private student loans, as well as other financial products not historically regulated by other federal agencies, since it opened last year. Beginning in March, the agency began accepting complaints about private student loans, eventually synthesizing the nearly 2,000 it received into a report for Congress.
The new report, published today, comes from the bureau’s student loan ombudsman, Rohit Chopra. Chopra examines the private student loan market place largely as described by the thousands of borrowers who wrote in with complaints, taking a narrower view of the industry than the bureau did as a whole in its report earlier this year. While the July report focused on regulating the private loan industry, suggesting changes such as involving colleges more closely in students’ borrowing or possibly allowing loans to be discharged in bankruptcy, Chopra suggests more incremental changes that could help borrowers who have already taken out the loans.
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