CFPB, Senator Warren Urge Student Loan Reforms
By Consumers Union on Thursday, May 9th, 2013
This week, a new report by the Consumer Financial Protection Bureau found that student loan debt is having a long term damaging “domino effect” on the economy by making it even more difficult for young adults to purchase their first home, start a small business, and save for retirement.
The report identifies a number of potential solutions, including giving private student loan borrowers the ability to refinance their loans and negotiate better lower payments over time – two reforms Consumers Union has been asking for.
On the same day the CFPB released its report, Senator Elizabeth Warren introduced legislation that would lower the interest rate on subsidized federal student loans for one year to .75 percent – the same rate at which big banks are able to borrow money from the Federal Reserve Board. The current 3.4 percent rate on federal loans is set to go up to 6.8 percent on July 1 unless Congress acts to extend the existing rate.
In her speech introducing the bill on the Senate Floor, Senator Warren asks Congress to make the same investment in our students that the government already makes in our biggest banks.
We think that makes a lot of sense, don’t you?
We’re working hard to ensure that sensible reforms like these are put in place, so that student loan borrowers get a fair deal from start to finish. To see our Seven Principles for Fair Student Lending, click here.
Do you or someone in your family have student loans? What do you think should be done to fix the student loan debt crisis? Tell us in the comments.