Recently the Consumer Financial Protection Bureau (CFPB) requested feedback from consumers about student loan issues. Advanced results and feedback on the survey are now available.
The focus of the CFPB effort is to make information more available to students and potential students so they can make the best and most informed decision possible before falling on the sword for student loans that are unforgiving.
One respondent said, “As a college adviser, I work daily with many first generation students. I believe that the default rate part and the graduation and retention rates will be very useful…so they can avoid the schools that will not help them graduate.” Excellent point.
It is relevant information for students to know if previous students ever made it to the graduation finish line or just obligated themselves for student loans and did not achieve a diploma in return.
Another person offered, “The school’s default rate will probably mean little to students and families without an explanation as to what it means to ‘default’ on a student loan. Many students and their parents (especially those who are the first in their families to attend college) do not understand terms like ‘default’.”
The CFPB had proposed a sample disclosure statement to be used to make good choices about student loans and schools. The goal of the CFPB is to make the information relevant and easy to digest.
People said they would like to see some sort of standardized form to layout all the details of the student loans including:
- Critical information including cost per year, loans and work-study options, and amount owed upon graduation.
- Graduation rates, length of repayment plan, monthly loan payment, and total debt upon graduation are also important.
- Job placement and salary statistics.
- The average cost at comparable institutions, as it appeared in the top right corner, is helpful.
- Including the total expected debt and monthly payment estimates is important.
- Different repayment and forgiveness options based on average starting salary should be included.
This is all steps in the right direction to at least not lead student into student loans blindly. More information is needed to help consumers make smart choices about investing in a college degree.CFPB Gets an Earful of Good Suggestions About Student Loan Disclosures by Steve Rhode