Student Loan Problems? Don’t Count on Uncle Sam

By: Stephanie Carson, Public News Service – NC

RALEIGH, N.C. – On Wednesday, the federal Consumer Financial Protection Bureau closed the doors of its Office of Students, put in place to handle consumer complaints regarding student loan companies.

According to the Center for Responsible Lending, Americans have $1.4 trillion in student loan debt, with average student borrowers owing $30,000 when they graduate.

Whitney Barkley-Denney, senior policy counsel with the center, says the office performed a vital service.

“The Office of Students was created to not just help educate borrowers about their student lending, but to enforce fair student lending practices against predatory for-profit colleges and predator student loan servicers, and they’ve been very successful in doing that,” she states.

The Consumer Financial Protection Bureau was created after the Great Recession in an attempt to protect consumers from fraud and unscrupulous activities of lenders.

Also this week, the U.S. House voted to eliminate CFPB guidelines drafted in 2013 to combat racial discrimination by auto dealers that secure car loans for customers.

Supporters of the rollbacks say current regulations are a government over-reach.

Barkley-Denney says it now will fall on states such as North Carolina to protect their residents.

“We think that states are going to need to step up and really take a leading and active role to make sure borrowers are protected when they borrow for school,” she states.

Since it began, the CFPB has reclaimed $750 million from lenders that were using illegal practices.

In an email sent to staff this week, Mick Mulvaney, CFPB interim director, said the agency would alter its mission to focus on providing consumers with information on their legal rights.