Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CFPB ombudsman blogs on sobering student debt
WASHINGTON (3/23/12)--Rohit Chopra, the Consumer Financial Protection Bureau's student loan ombudsman, posted a recent blog entry that called the country's student debt market "too big to fail," and noted that among problems presented by this massive student debt is its effect of slowing the recovery of the housing market.

Noting the bureau's recently launched effort to understand the size of the private student loan market, Chopra called the finding "sobering," and said it appears student loan debt hit the trillion dollar mark several months ago.  That finding, he wrote, is much larger than estimates from other recent reports.

Chopra blogged: "Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us."

As noted above, slowing the recovery of the housing market is one such consequence.  "Student loan borrowers are sending big payments every month to their loan servicers, rather than becoming first-time homebuyers. This debt can also put added stress on the borrowing capacity of the household and government sector," the CFPB ombudsman wrote.

The CFPB says it is tackling the student debt problem from a number of fronts, such as working with the U.S. Department of Education and launching the "Know Before You Owe" project to help borrowers, including student borrowers, understand debt implications.

Chopra said the bureau will release the full results of its study on the private student loan market this summer.
Other Resources

RSS print
News Now LiveWire
Why is a #creditunion a good fit for you? via @MONEY
13 hours ago
The numbers are in: Home Depot data breach impact on #creditunions = $57.4 million, 7.2 million credit/debit cards
14 hours ago
.@Nussle : We'll back off when retailers accept their breach responsibility #NewsNow
17 hours ago
RT @asmarterchoice: RT @daily_finance: Top 5 money management tips for 30-somethings
17 hours ago
Operational efficiencies focus of new @CUNA program #NewsNow
17 hours ago