Banking Agencies Urge Help For Student Borrowers

The Federal Reserve Board, FDIC and Office of the Comptroller of the Currency are encouraging financial institutions to help student loan borrowers who are facing difficult financial situations.

The banking regulators have guidelines that allow for the modification of student loans – including extensions, deferrals, renewals and rewrites to help borrowers. In a statement issued Thursday, they encourage institutions that offer private student loan workout programs to provide their borrowers with information that explains the various offerings and eligibility requirements.

Student loan affordability has become a big issue on Capitol Hill through various relief bills set to help financially troubled borrowers. Sens. Elizabeth Warren, D-Mass., and Jack Reed, D-R.I., and Rep. Kyrsten Sinema, D-Ariz., have offered bills aimed at helping make federally guaranteed loans more affordable.

In the House, Democratic Reps. George Miller and Maxine Waters, both of California, released a joint statement following the CFPB hearing in May on student loan affordability, lauding the bureau’s work on student loan debt.

On any future regulations addressing private student loans, NAFCU has urged the CFPB and lawmakers to avoid a one-size-fits-all approach and to allow credit unions flexibility in meeting their members’ student loan needs.

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