Next to a home, a college education can be the most expensive purchase one makes in a lifetime. And like many people who took out mortgage loans before the Great Recession, a growing number of borrowers are struggling to pay off student loans that were originated by private lenders in the mid-2000s.
According to a report on private student loans released by the Consumer Financial Protection Bureau, some private student lenders misled borrowers about their loan terms as well as their federal student loan options, and since 2008, student loan debt has increased and default rates have escalated. The report lists the total amount of outstanding private student loan debt in the U.S. as more than $150 billion and cumulative defaults on private student loans as more than $8 billion.
Among several recommendations the CFPB and Secretary of Education made to Congress in the report is to consider allowing private student loans to be dischargeable in bankruptcy. Since 2005, the government has not permitted discharging private student loans in bankruptcy except in cases of undue hardship, the CFPB said.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
- Exclusive discounts on ALM and CU Times events.
- Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.