To finance the increasing cost of college, students and families have increasingly resorted to private student loans, defined as student loans originated outside of the Direct Student Loan program by commercial entities. Private student loans generally include higher interest rates and conditions less favorable to borrowers than federally-backed loans.
Through public policy and legislative action, NACAC seeks to ensure that private student lending outside of the federal loan programs is carefully monitored to ensure that student and family concerns are protected.
NACAC is currently advocating for:
- Development of the Consumer Financial Protection Bureau (CFPB) with authority over private student loans, as authorized by the Wall Street Reform and Consumer Protection Act of 2010, Bureau cannot function until Director is confirmed by Congress
- Ability of private student loans to be discharged in bankruptcy
- Requirement that colleges certify private loans and inform students of any untapped federal loan eligibility before taking on a private student loan.
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Financial Reform Legislation
2010
TICAS: Statement on Conference Agreement Establishing CFPB
Coalition Letter Urging CFPB Authority Over Private Student Loans in Restoring American Financial Stability Act
Coalition Letter Supporting Loan Certification Amendment
Coalition Letter Applauding Inclusion of CFPA Authority Over Private Student Loans
Coalition Letter Commenting on Self-Certification Form
Coalition Letter Urging CFPA Authority Over Private Loans
Bankruptcy Legislation
2011
Senate: S 1102 Fairness for Struggling Students Act of 2011
House: HR 2028 Private Student Loan Bankruptcy Fairness Act of 2011
Senator Richard Durbin (D-IL) and Representative Steve Cohen (D-TN-9), Introduce Legislation to Restore Fairness in Student Lending
Coalition Letters to Senator Durbin and Congressman Cohen Expressing Appreciation for Introduction of Legislation
2010
TICAS: Statement on Private Student Loan Bankruptcy Fairness Act of 2010 approval by House Subcommittee on Commercial and Administrative Law
Coalition Letter Supporting Private Student Loan Bankruptcy Fairness Act of 2010
Testimony on Dischargeability of Private Student Loans
House Judiciary Committee: Hearing on H.R. 5043, the "Private Student Loan Bankruptcy Fairness Act of 2010
Other Consumer Financial Protection Initiatives
2010
TICAS: Real Loan Forgiveness, HR 2492 would ensure forgived loans are not taxable income
Coalition Letter on Affinity Card Transparency Amendment to HR 627
TALF consumer protection letter to Secretary of the U.S. Department of the Treasury Timothy Geithner
Financial Literacy Resources
Council for Economic Education: Online Lessons
National Endowment for Financial Education (NEFE): High School Program
MyMoney.gov: Going to College
U.S. Department of Treasure: President Obama’s Advisory Council on Financial Capability
U.S. Department of Education: Student Aid on the Web Financial Literacy (Personal Finance 101)
NACAC Resources
Loan Forgiveness and Tax Deduction for College Admission Counseling Professionals (Congress has not yet appropriated funds for professionals in low-income communities)
Congress Passes Credit Card Holders Bill of Rights
Basics of Borrowing Webinar
Knowledge Center
Compose your own message on the NACAC Legislative Action Center
Other Resources
Consumer Financial Protection Bureau
National Consumer Law Center: Student Loan Borrower Assistance
TICAS' Project on Student Debt: Questions to Ask About Private Loans
Research on Private Loans
U.S. Department of Education's National Center for Education Statistics:
The Expansion of Private Loans in Postsecondary Education
TICAS' Project on Student Debt:
- State by State Data
- Private Loans: Facts and Trends
- Student Debt and the Class of 2009
- Critical Choices: How Colleges Can Help Students and Families Make Better Decisions about Private Loans
- Why the Consumer Financial Protection Agency Needs Full Authority Over Private Student Loans
Federal Reserve Board of Governors:
Report to the Congress on College Credit Card Agreements
Government Accountability Office:
Student Loans: Federal Web-based Tool on Private Loans Would Pose Implementation Challenges and May be Unnecessary
National Consumer Law Center:
- Testimony on The Private Student Loan Bankruptcy Fairness Act of 2010
- Too Small To Help: The Plight of Financially Distressed Private Student Loan Borrowers
- Paying the Price: The High Cost of Private Loans and the Dangers for Student Loan Borrowers
- Finding A Way Out: Improving the Assistance Network for Financially Distressed Student Loan Borrowers
- No Way Out: Student Loans, Financial Distress, and the Need for Policy Reform
U.S. Public Interest Research Group:
The Campus Credit Card Trap
California Research Bureau:
Student Loans for Higher Education
American Council on Education:
Who Borrows Private Loans
Consumers Union:
Helping Families Finance College: Improved Consumer Disclosures and Counseling
Institute for Higher Education Policy:
The Future of Private Loans: Who is Borrowing, and Why?
Mark Kantrowitz (FinAid.org):
Education Lending Suggestions for the Consumer Financial Protection Bureau (CFPB) and the Private Education Loan Ombudsman
NACAC Policy Brief: Private Student Loans and TARP Reform
Private Student Lender Bailout Provisions
The Higher Ed Watch: The Perverse Consequences of a Bankrupt Policy
The Higher Ed Watch: Stimulus Agreement Reached That Will Benefit Students and Colleges
HR 384 “TARP Reform and Accountability Act of 2009”
House Financial Services Committee TARP Resource Page
Senate Committee on Finance
Higher Education Opportunity Act (HEOA) Provisions
Private Education Loan Applicant Self-Certification Form
Federal Reserve Proposal to Amend Truth in Lending Act (TILA) Requirements for Private Student Loans