We wrote last month about a request for input by the Consumer Financial Protection Bureau (CFPB) on student loan affordability. CFPB is asking for input from borrowers, students and any and all interested parties on how debt repayment for educational loans can be made more affordable. The House recently passed a 2014 budget proposal that included drastic cuts to many income based repayment plans – these are lifelines for those suffering under the weight of oppressive student loan debt. It’s important that you raise your voice now on this critical issue – before the April 8th deadline!
At Tuition.io, we help student loan borrowers manage their debt, so naturally we have some strong opinions on this critical issue. With that in mind, we contributed our thoughts to the CFPB and we share that now in hopes that you too will join us in helping bring attention to the student loan debacle our nation is facing.
Income Based Repayment (IBR) and Pay As You Earn (PAYE) have provided meaningful relief for student loan borrowers struggling to make their payments, but those options only apply to federal loans. While only roughly 15% of overall student debt is private, many individual borrowers shoulder a much higher proportion of private loans. There is no program in place to help borrowers with private loans when they get in trouble, and those borrowers are financially crippled as a result.
There is also no “front door” online for borrowers, and that creates confusion. This is bad for consumers, because they don’t end up seeing the best options available to them. Instead, they often wind up refinancing with whichever private lender spends the most for expensive search keywords – even, in some cases, when they’re eligible for federal consolidation. The government needs to step in to create an efficient market.
There should be a single online portal where a borrower can go to submit information about his/her student loans and get an individualized response from private lenders AND the government, presenting him/her with options for consolidation, forgiveness and/or refinancing at more favorable interest rates. Ideally, the government would work with this portal to offer principal reductions based on a range of borrower qualifications.
At Tuition.io, we have the platform in place to build this marketplace. Unlike the incumbent players in the student loan arena trying to evolve their online capabilities to catch up to 2013, we’re an internet company that serves the student loan space. Great user experience is in our DNA. Leveraging technology by providing a great online experience in a single entry point to resolving loan issues will empower student loan borrowers to help themselves, and their resulting financial stability will be an important catalyst for growing the larger economy.
Our free student loan management tool is already in use by many borrowers to provide them a convenient dashboard to keep up with their loans and better manage their debt. We hope you will also share your thoughts with CFPB. Here is the link to the request for information with directions on how to give your input. To data, there are roughly 920 comments contributed – this seems a low response rate considering millions of Americans are drowning in student loan debt and could use some measure of relief.
There are just five days left before the comment collection phase closes on April 8th – please add your input today. And if you are juggling student loans of your own, try Tuition.io’s free student loan management tool to check out repayment plans, view your loans and contact your lenders.