Alarming Private Loan Trends
Our new analysis of federal data from 2007-08 reveals that two-thirds of private loan borrowers did not take out all they could in safer, more affordable federal loans. Private Loans: Facts and Trends also found that a majority of private loan borrowers in 2007-08 attended schools with tuition and fees of $10,000 or less, and that African-American students were the most likely to take out private student loans.
Inadequate Disclosures Lead to Opportunities for Action
Last year Congress mandated that lenders give consumers essential information about private loan costs and terms before they sign on the dotted line. Unfortunately, the Federal Reserve Board's final rules for these disclosures don't go nearly far enough to protect consumers, despite our recommendations. For what happened and why it matters, see Summary of New Disclosures for Private Student Loans.
Congress is considering creating a new Consumer Financial Protection Agency that would have the authority to improve disclosures and make private loans much safer for new borrowers. For example, it could require that all new loans be dischargeable in cases of death, disability, or school closure. It might even be able to help current borrowers avoid default.
Please urge your senators and representative to support the new Consumer Financial Protection Agency and ensure it has the authority to help and protect private loan borrowers!
Become a Borrower Spokesperson
Policymakers and the press are paying more attention to the plight of private loan borrowers, and we want them to hear from you! If you're interested in sharing your experience with private student loans, please fill out our Borrower Spokesperson form. Reporters and legislative staff frequently ask us to put them in touch with specific types of borrowers, and we'll connect you when there's a fit.