Too many student loan borrowers are being left behind due to breakdowns in the federal programs
College debt, which more than 43 million Americans carry, is among the reasons for widespread economic anger in this vitriolic election year. Many of those who are saddled with this $1.3 trillion albatross are barely moving ahead economically. Congress is doing almost nothing to help them.
Many graduates who should be saving for retirement, buying homes and starting families are unable to do so because of the financial anchor of college loans. Most of them should be able to refinance or lower their borrowing burden, but they don’t know about government programs designed to help them.
In reviewing more than 5,500 complaints against student loan servicing firms in a recent report, the Consumer Financial Protection Bureau (CFPB) found that borrowers were uninformed on how they could reduce their loan payments and avoid default, which damages their credit ratings.
This report offers further evidence that industry practices and needless red tape can turn a student loan into an unbearable burden.
Where is the government failing when it comes to student loans? Here are some glaring trouble spots:
- Communications with borrowers on how they can avoid defaults is awful. “The Department of Education estimates that more than 8 million student loan borrowers have gone at least 12 months without making a required monthly payment and have fallen into default,” the report found…