CBA Response to CFPB RFI Regarding an Initiative to Promote Student Loan Affordability

Dear Ms. Jackson:

The Consumer Bankers Association (CBA)i appreciates the opportunity to submit comments in response to the Consumer Financial Protection Bureau’s (CFPB’s or Bureau’s) request for information (RFI) from the public to determine options that would increase the availability of affordable payment plans for borrowers with existing private student loans. We understand the Bureau will use this information to provide more detailed information on ways to encourage the development of more affordable loan repayment mechanisms for private student loan borrowers. Our comments reflect the view of CBA’s Education Funding Committee. The Committee includes the largest bank lenders of private student loans.

Our responses to the 16 questions posed in the RFI are included in italics below:

Scope of Borrower Hardship

1. What are the primary drivers of private student loan borrower distress?

CBA Responses:

Lack of employment or underemployment Income to debt ratio High cost of higher education Cost of college versus earning potential College major choices not aligned with employment opportunities/future earnings Failure to graduate/failure complete program of study

a. What characteristics might predict distress at loan origination?

To read the full Comment Letter, download the PDF.