CFPB Requests for Congressional Review on Bankruptcy Rules by Jason Spencer

One of the biggest problems of America’s youth today is the repayment of student loans. Majority of students take loans from the Federal government, but there are quite a number of students who have opted to take out student loans from private lending institutions. Unfortunately, a good number of students have had problems in repayment of these loans.
It would be natural to think that the government will protect you if you’re having problems in paying your loans. The last recourse available that should be able to protect your assets from debt collectors is to file for Chapter 13 Bankruptcy.
Sad to say, the bankruptcy law explicitly states that qualified educational expenses are not covered by this law. This means that if you have an outstanding student loan that you can’t pay, you’re at the mercy of the debt collectors.
This is one of the concerns of the Consumer Financial Protection Bureau (CFPB). The CFPB already has quite a number of complaints from consumers with regards to private student loans. The bureau does whatever they can to help those who have problems with private student loans, but they can only do so much.
One of the reasons why the CFBP has called for a congressional review of the bankruptcy law is because of the significant rise in student dept and the number of students who have had to default on their student loans.
A report from the Consumer Financial Protection Bureau (CFBP) shows that outstanding debts of student loans have reached a staggering $1 trillion. The outstanding debt to private lending institutions is approximately 15% of this amount.
Quite a good number of students have outstanding private student loans and the CFBP believes that the reason behind this is because private lending institutions have made it easier for students to take out loans with them. These institutions have in fact lowered the required credit score just to make their products more appealing to students.
Another reason why PSL’s have increasingly become popular is because educational institutions do not monitor or give advice to students before they take out loans from private lending institutions. According to CFPB’s recommendations, educational institutions should ensure that students first exhaust all the means to take out student loans with the federal government before resorting to private lending institutions.
Educational institutions should also closely monitor the loan amount that students apply for. These institutions should ensure that the students only apply for amounts that would cover their education and not more.
The fact that a good number of students are having problems in the repayment of private student loans is a matter for concern. Not only that, but the bankruptcy law cannot protect the assets of those who are having problems with these loans.
If you have an outstanding private student loan that you are having problems repaying, then it would be a good idea to seek advice and assistance from the CFPB. Some sound advice is provided at their website for students who have taken out student loans from private lending institutions and are currently having problems repaying those loans.
 Jason Spencer

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