[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71329-71331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29737]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
[Docket No. CFPB-2011-0037]
Request for Information Regarding Private Education Loans and
Private Educational Lenders
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice and request for information.
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SUMMARY: Section 1077 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (``Dodd-Frank'') requires the Bureau of Consumer
Financial Protection (``Bureau'' or ``CFPB'') and the Department of
Education, in consultation with the Department of Justice and the
Federal Trade Commission, to prepare a Report on Private Education
Loans and Private Education Lenders. The Bureau seeks information on
private education loans and related consumer financial products and
services that are currently being offered to or used by students and
their families for the financing of postsecondary education.
DATES: Comment Due Date: January 17, 2012.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-
0037, by any of the following methods:
http://www.regulations.gov. Follow the instructions for
submitting comments.
Email: [email protected].
Mail: Monica Jackson, Office of the Executive Secretary,
Consumer Financial Protection Bureau, 1500 Pennsylvania Ave. NW.,
(Attn: 1801 L Street), Washington, DC 20220.
Hand Delivery/Courier in Lieu of Mail: Monica Jackson,
Office of the Executive Secretary, Consumer Financial Protection
Bureau, 1700 G Street NW., Washington, DC 20006.
Instructions: The CFPB encourages the early submission of comments.
All submissions must include the document title and docket number.
Please note the number of the question to which you are responding at
the top of each response (respondents need not answer each question).
In general, all comments received will be posted without change to
http://www.regulations.gov. In addition, comments will be available for
public inspection and copying at 1700 G Street NW., Washington, DC
20006, on official business days between the hours of 10 a.m. and 5
p.m. Eastern Time. You can make an appointment to inspect the documents
by telephoning (202) 435-7275. All comments, including attachments and
other supporting materials, will become part of the public record and
subject to public disclosure. Sensitive personal information such as
account numbers or Social Security numbers should not be included.
Comments will not be edited to remove any identifying or contact
information.
FOR FURTHER INFORMATION CONTACT: For general inquiries, submission
process questions or any additional information, please call Monica
Jackson at (202) 435-7275.
SUPPLEMENTARY INFORMATION: In support of the study required under
section 1077 of Dodd-Frank, the Bureau seeks information on private
education loans and related consumer financial products and services
that are currently being offered to or used by students and their
families for the financing of postsecondary education. As used in
Section 1077 of Dodd-Frank, ``private education loans'' refers to loans
made
[[Page 71330]]
by a school or by a financial institution to finance the cost of post-
secondary education, but excluding loans guaranteed under Title IV of
the Higher Education Act, commonly referred to as ``federal'' loans.\1\
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\1\ Title IV loans are commonly referred to as ``federal loans''
and are often known as ``Stafford Loans,'' Perkins Loans,'' and
``PLUS and GradPLUS'' loans in the current federal Direct Loan
program guaranteed under Title IV of the Higher Education Act.
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Section 1077 of Dodd-Frank requires the Bureau and the Department
of Education, in consultation with the Department of Justice and the
Federal Trade Commission, to prepare a Report on Private Education
Loans and Private Education Lenders (``Report'').\2\ Section 1077
mandates that the Report address a list of questions, some of which may
best be answered with quantitative data. For those questions, the
Bureau will initially utilize records already held by the Department of
Education, information obtained directly from lenders (both for-profit
and non-profit) and industry associations, and information already
collected or otherwise available from other public and private sources.
To supplement these data and to capture qualitative information that
may help to answer the questions posed by Congress, this notice and
request for information seeks input from all sources, both inside and
outside of the financial services industry, including consumers,
financial services providers, schools, organizations, and other members
of the public regarding (a) Issues concerning private education loans
and lending, where existing quantitative data may be incomplete, and
(b) qualitative issues where public input will add perspective that may
improve the Report.
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\2\ For the purposes of this request for information, the terms
``private education loans'' and ``private student loans'' may be
used interchangeably, as may the terms ``private educational
lenders'' and ``private student lenders.'' Dodd-Frank defines
``private education loans'' by reference to section 140 of the
Truth-in-Lending Act, 15 U.S.C. 1650.
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We refer the public to the questions posed by Congress in Section
1077 of Dodd-Frank at http://go.usa.gov/XDr. To assist the Bureau in
responding to those questions, we seek public comment on the questions
below. The Bureau is particularly interested in learning what
information would help students make informed decisions about which
financial services and products are right for them and what approaches
would best assist recent graduates facing (or about to face) difficulty
making private education loan payments. The questions are grouped into
four broad categories, (a) Scope and use of private education loans,
(b) information and shopping for private education loans, (c)
institutional loans, and (d) repayment. Please feel free to respond to
all of the questions or only those that interest you, but please be
sure to indicate in your comments which questions you are answering.
Scope and Use of Private Education Loans
1. In addition to private education loans, to what extent do
students and their families rely on other forms of non-federal debt
financing to pay for postsecondary education (e.g. tuition payment
plans, student credit cards, parent or family credit cards, home equity
lines of credit, etc.)?
2. For students who do not exhaust their federal loan options,
including those that require the completion of a Free Application for
Federal Student Aid (FAFSA), before turning to private education loans,
what explains their choice of private loans?
Information and Shopping for Private Loans
3. From what sources do students and their families obtain
information about private education loans and private lenders? What
sources are most helpful and accurate?
a. How effective are the existing disclosures provided by private
education lenders regarding the terms and conditions of the loans?
Among other things, comments could address issues such as whether
students and their families feel they adequately understand the terms
and conditions of various financial products offered to finance their
education goals.
4. What sources of information do students rely upon to gauge the
appropriate amount of student debt when selecting a school or program?
Do students rely on financial aid budgets provided by the school or on
other sources to determine amounts needed to cover tuition and other
expenses? Do they consider ability to repay in choosing amounts of debt
to incur? If so, what resources are available to help them determine
their ability to repay?
Institutional Loans
5. To what extent are students offered or solicited to take out
private education loans made directly by the school they are attending?
How do such programs compare to those offered by non-school private
educational lenders (e.g., interest rates, ease of approval,
underwriting criteria, repayment terms etc.)?
6. What types of schools most commonly offer their own private
student loan programs? How do schools select the students they deem
eligible for their loan programs (e.g., academic merit, financial need,
recruitment, retention)? How are school loan programs funded?
Repayment
7. How well are the amount and timing of private education loan
repayment terms understood (a) When borrowers take out the loan, (b)
during school, (c) at graduation, and (d) when repayment begins? Among
other things, comments could address individual experiences at each
stage of a student's education, or reference existing studies or survey
work concerning the percentage of students with different levels of
understanding regarding their debt load at each stage of their
education.
8. What are the best practices at school financial aid offices in
providing students with information about students' future loan
payments and ability to afford those payments? The Bureau is
particularly interested in steps or programs schools voluntarily use to
create or enhance students' awareness of their debt loads and ability
to afford their loan payments, as well as any evidence concerning the
impact of such initiatives.
9. How much does a student's debt load affect undergraduate field
of study or career choices after graduation? To what extent do
undergraduates' or recent graduates' debt loads affect their decision
to attend graduate school or seek advanced professional degrees?
10. Are students adequately informed of their rights as borrowers
on private education loans? What resources are students offered to
protect their rights? Who directs them to resources that may help them
protect their rights (e.g., friends, schools, lenders, particular Web
sites, etc.)?
11. What financial education techniques and resources have
empirically-demonstrated effectiveness in helping borrowers avoid
default on private education loans? How prevalent are these techniques
and resources? Among other things, the CFPB is particularly interested
to learn:
a. Which alternative repayment plans have proven most effective in
keeping borrowers out of default and why?
b. Whether private lenders adopted repayment program modifications
to respond to the high unemployment rate among recent graduates in the
wake of the financial crisis?
c. Are there techniques that private education lenders should try
to help reduce default?
d. Have private lenders developed rehabilitation programs for
defaulted loans?
[[Page 71331]]
Dated: November 9, 2011.
Meredith Fuchs,
Chief of Staff, Consumer Financial Protection Bureau.
[FR Doc. 2011-29737 Filed 11-16-11; 8:45 am]
BILLING CODE 4810-AM-P