You may want to hold off on that home purchase/new business start/auto purchase/flat-screen TV/evening out/vente cup of coffee.
You keep hearing that economic recovery is gathering strength. (Which in practice translates into record numbers of people on food stamps, fewer people working for a living, and a drop in both new and existing home sales.) But here’s a big D-Minus that could bring down the whole economy’s GPA:
According to the new Consumer Financial Protection Bureau, outstanding student loan debt now tops $1 trillion. And more than a quarter of that debt is delinquent. Student loan ombudsman Rohit Chopra claims the CFPB is addressing the problem by issuing work sheets, “providing tools,” and even centralizing control:
At the CFPB, we are attacking the problem on multiple fronts. Working with the Department of Education, we launched a Know Before You Owe project to solicit input on a “financial aid shopping sheet.” The sheet should help students understand the debt implications of their college choice. We are supervising private student loan providers to ensure they comply with Federal consumer financial protection laws. We are providing tools for borrowers to help them navigate their student loan repayment options. And we set up a student loan complaint system to help ensure that private student lenders and servicers are responsive to potential mistakes and problems that borrowers encounter.
Before we opened our doors, these duties were spread across a myriad of federal agencies. Bringing these functions under one roof means we can better ensure that financial institutions operating outside of the traditional banking system are subject to the same rules of the road as all of you.
More at the link.
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