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CBA Statement on CFPB Federal and Private Student Loan Servicing Report
Washington, D.C. (September 29, 2015) – Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), released the following statement in response to a Consumer Financial Protection Bureau (CFPB) report about federal and private student loan servicing:
“Though just seven percent of the market, private student borrowers have real options and are provided arguably the strongest consumer protection: a robust underwriting process that includes an ability-to-repay test. Private loans made by CBA members have a delinquency rate of less than 3 percent, the true test of successful lending and servicing. In addition, the refinancing market for private education loans is healthy, as evidenced by strong product offerings from both long-standing market participants and a growing number of new market entrants. In all cases, it is in the private lender's best interest to do everything in its power to help borrowers repay their loans. Our banks are committed to helping America’s students succeed, and their robust underwriting standards, plus strong servicing programs to assist their borrowers throughout the life of the loan, are helping families meet their obligations.
“With nearly 98 percent of private student loans being successfully repaid—putting delinquency rates for private borrowers at their lowest level since before the 2008 crisis—and tuition prices having risen 1,120% since 1978, we encourage the CFPB, the Department of Education, Department of Treasury, and Members of Congress to focus their attention on the root of the problem for students and borrowers, which is college affordability,” said CBA’s President and CEO Richard Hunt.
CNBC Commentary: Richard Hunt - How to fix the student loan mess