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Posts from November 2011

Chime in on private student loans


For the last month, student loans have kept us pretty busy. We released our Student Debt Repayment Assistant to help borrowers understand their options when repaying their loans. We launched Know Before You Owe: student loans with the Department of Education to get your feedback on a draft Financial Aid Shopping Sheet. And we’re not done yet.

Today, we’re launching another student loan initiative with the Department of Education, and we want your input. The CFPB has published a Notice and Request for Information Regarding Private Education Loans and Private Educational Lenders in the Federal Register. The title may be a mouthful, but the reality is simple: we need public input on important questions about private student loans. It doesn’t matter whether you have two sentences or two pages of input – we want to hear from you.

Please help us by telling us about your experiences with private student loans.

The private student loan market is one of the least understood credit markets. We know there are all sorts of private student loans: some from banks and credit unions, some from schools, and some from other types of lenders. We know that lots of students use these loans every year. But to make sure the market works for students, lenders, and schools, we need a lot more information. Your stories can tell us more about how the private student loan market functions (or doesn’t), how and why you got a private loan, and how it is (or is not) working for you.

We’d love to hear from students, families, school counselors, lenders, servicers, and anyone who has anything to do with private student loans. When we talk about the private student loan market, we’re really talking about all of your experiences. Hearing your stories will help us understand how people make decisions. The goal is to have all the facts as we prioritize what we do to make sure that the market works for students, lenders, and schools.

Our team on this initiative includes my colleagues from all corners of the CFPB: research economists, fair lending experts, financial analysts, and the Private Education Loan Ombudsman. We’ll be preparing a report based on data gathered by us and the Department of Education. We’ll also submit our report to Congress, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. We plan to submit this report this summer, and we want your input reflected in it.

Click here to get started. Read through the notice and submit whatever information you think might be helpful. The notice will be published in the Register on Friday. To comment today, send comments in any of the methods identified under “Addresses” on page one of the notice. We’re accepting comments for 60 days.

And please help us get the word out on this initiative by sharing it with Facebook, Twitter, or email below. You can also sign up here to get updates on our student loan initiatives.

Thanks for your participation, and we’ll post further information on this blog as we make progress on this report.

Rick Hackett serves as the CFPB’s Assistant Director for Installment Lending Markets.

Lessons from the road


Since starting work at the Consumer Financial Protection Bureau (CFPB) three weeks ago, I have traveled from coast to coast to meet with seniors who have suffered from financial scams. In my travels, I have gained many valuable insights and heard too many stories of people taking advantage of the elderly. I plan on bringing these stories to Congress today when I testify before the U.S. Senate Subcommittee on Financial Institutions and Consumer Protection. (more…)

Honoring veterans


November 11th is Veterans Day. This week the CFPB took a moment to recognize and honor the veterans in our ranks: 87 of them! We showed photos of them while they were in the service (some rather surprising), and we also asked them to sum up in three words the meaning of Veterans Day. The answers were beautiful and meaningful. Here are a few. (more…)

Plan your spending to avoid holiday debt


For shoppers, seeing “November” on the calendar means Black Friday – the unofficial start of the holiday shopping season – is just around the corner. Taking a few minutes now to plan your holiday spending could help you avoid taking on debt that stretches well beyond the New Year.

Start by creating a holiday spending plan. Decide how much you can afford to spend this season. Include gifts, travel, parties, decorations, and any other holiday expenses. Consider discussing the plan with your family members. Look at how much you’ll earn between now and the holidays and determine how much you’ll need to set aside each paycheck to save the amount you need.

Low-cost ways to give

Having trouble buying gifts for every one of your friends and family members? Chances are they are, too. Consider different ways to make the holidays fun without breaking your budget.

Holiday gift exchange

Draw names and only buy a gift for the person you choose.

Make something special

Sometimes the best gifts are the ones you make yourself.

Give your time

Offer to provide a service, such as cleaning or cooking a meal, for a day, a month, or the year.

Make a list of the people you’re giving gifts. Decide how much you can spend on each one. If you have specific gifts in mind for each person, start comparing prices online and keep an eye out for discounts and sales.

Keep track of what you spend. If you find that you don’t need to spend as much as you thought in some categories, shift the extra funds to others. Or, save the money and give yourself the gift of a head start in the New Year.

Avoid impulse purchases. Instead, make a note of the product, where you saw it and how much it was. Consult your spending plan, and, if there’s room, return for the purchase. Using cash, like three quarters of Americans say they do for most of their holiday purchases, can also help you avoid splurges, as well as potentially costly fees or interest from debit cards, credit cards, layaway, or store financing.

Leave your credit cards at home unless you know you need them for a specific purchase and you have a specific plan to repay the debt.

Check the details when purchasing a gift card. Any fees that may be imposed in connection with the card will be provided on or with the card. Dormancy, inactivity and service fees (that is, fees for using or not using the card) are not allowed unless you don’t use the card for a year. If the card has an expiration date for the funds, it will also be listed on the card. The Federal Trade Commission has more information on buying, giving, and using gift cards.

Have other tips to avoid overspending during the holidays? We’d love to hear them. Share them with us in the comments.

Dan Rutherford is a Senior Content Specialist in the Office of Financial Education.