CFPB Introduces New Plan to Help Veterans
By Consumers Union on Friday, August 2nd, 2013
Each year, about a quarter million servicemembers leave the military. Many of these veterans and their families are struggling with a number of financial issues, from student loan repayment to difficulties with credit reporting agencies.
Luckily, the Consumer Financial Protection Bureau (CFPB) is taking new steps to make sure that veterans get the financial counseling and advice they need as they adjust to life outside of the military. It’s starting a new program next year to put financial coaches in touch with military veterans and others who are in financial distress. These counselors will offer financial advice to veterans at existing service centers throughout the nation. The CFPB hopes to help tens of thousands of veterans and the needy through this program.
The growing size of student debt is of particular concern among veterans. According to a CFPB report released in late 2012, service men and women hold an average of over $25,500 in student loan debt.
Moreover, veterans have faced problems in working with their loan servicers. As we noted in a blog post last year, CFPB found that veterans aren’t always getting the information they need to select the rates and repayment plans that will work best for them.
The CFPB found that student loan servicers often took advantage of servicemembers by not fully advising them of their military benefits and repayment options. For example, servicers sometimes failed to inform military members of programs that could save them money, such as Income-Based Repayment. This is a serious issue, as servicemembers who end up in financial trouble can lose their security clearance, compromising their military careers and making it more difficult for them to secure future employment.
By providing counseling, the CFPB may help empower veterans to get a fair repayment plan for their student loans. This is an encouraging development, but there’s more work to be done to ensure all borrowers are treated fairly. Consumers Union also supports a number of reforms to rein in student loan servicing abuses, like protecting borrowers from unfair collection and repayment practices.
Have you experienced problems with your loan servicer? Consumers Union is collecting stories from consumers, including servicemembers, about their student loan concerns. Please share your story today!