Washington, D.C.– Rep. Raúl M. Grijalva today released the following statement in support of the financial regulatory bill’s reforms of the student loan industry:
“The financial reform bill agreed to by the Congressional conference committee last week and set for a vote later this week includes strong and timely improvements to the private loan system for higher education.
Among other financial products, private student loans will soon be monitored and regulated by the newly established Consumer Financial Protection Bureau (CFPB). The bill establishes a student loan ombudsman at the CFPB to help students and families navigate the private loan process.
These measures are desperately needed. Many borrowers are vulnerable to deceptive marketing practices, and private student loans are not discharged even in bankruptcy. Private loans lack many protections offered by federal student loans, including fixed rates, income-based repayment plans, loan forgiveness, and cancellation in case of death or disability.
The establishment of the CFPB and the ombudsman position will protect students and families from unfair lending practices and create more security when making important decisions about financing higher education. I strongly support these provisions and call on my colleagues to do the same.”