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Live from Milwaukee!

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Today, we held a field hearing on student debt in Milwaukee. The hearing featured remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

The live event has now ended, but we’ll have a recording available here soon.

You can keep the conversation going on social media with #StudentDebtStress and tell us about your student debt stress.

Tell us about your student debt stress

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If you are paying back student loans, you are not alone. Over 40 million Americans are repaying more than $1.2 trillion in outstanding student loan debt. Significant debt can have a domino effect on the major choices you make in your life: whether to take a particular job, whether to move, whether to buy a home, even whether to get married. For many of you, student debt stress makes these big milestones seem out of reach.

We’ve heard that some student loan servicers (the company that sends you a bill each month) may be adding to that stress. We’re seeking information from the public about the student loan servicing practices that may make it harder to get ahead of your debt.

We want to hear from you about your experience with your student loan servicer. If you’ve run into roadblocks, tell us about it – for example, we want to know if you’ve had payment processing problems, servicing transfer snags, communication confusion, or any other challenges when repaying your student debt.

Simply click this link to send us an email, which will be included in the public record. Please don’t include sensitive information like account numbers and social security numbers. We’re accepting comments through July 13.

In the infographic below, you can learn more about roadblocks some borrowers have encountered when dealing with their student loan servicers.

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We’re also calling on other stakeholders, including financial institutions, colleges, consumer advocates and policy experts to share their feedback. A full list of questions we’re asking the public are available in our Request for Information.

In the next few weeks, we encourage you to check back for more information about our work to strengthen student loan servicing and to hear the experiences of others with student debt. Be sure to tell others about the chance to include their stories in the public record. Spread the word to friends and family with student debt stress using  #StudentDebtStress on social media, but remember you must click this link to email an official comment.

If you have questions about repaying your student loans, check out our Repay Student Debt feature of Paying for College to find out how you can tackle your student loan debt.

If you have a problem with your student loan, you can submit a complaint online or call us at (855) 411-2372.

Having trouble with a link in this blog post? Check out the Request for Information for more information on how to submit an official comment.

Reminder: What happens to your student loans if your school is shut down

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When you’re told that your college will be shutting down, there can be a lot of uncertainty about what comes next. In light of recent closures of certain for-profit colleges, we wanted to share some helpful advice to help you navigate the situation.

This information and answers to other common questions about student loans are also available through Ask CFPB.

If you have federal student loans

If you have federal student loans and are currently enrolled or recently left a college or university that has shut its doors, you may be able to discharge (cancel) your loans by applying for a closed school discharge, which requires you to fill out a form.

This option is only a possibility if your school closes. If you are attending a school that is sold, you may not be eligible to ask for discharge under this process, even if your school no longer offers your program of study.

If you do have your federal loans discharged and you end up transferring credits to a similar program, you may have to pay back the loans that were discharged.

If you have private student loans

Generally, if you have private student loans, you may still be responsible for repaying them. However, some states may have programs that assist students with private student loans in the event of a school closure. In addition, some private student lenders may offer options to assist certain borrowers in this situation.

If you think you won’t be able to afford to repay your private student loan, you should contact your student loan servicer immediately to learn more about your options. And if you run into trouble, you can also submit a complaint online or by calling (855) 411-2372.

If you’re offered an option for a “teach-out” to complete your program

If your school has announced that it is closing, you may be offered a “teach out,” an arrangement through which you may be able to complete your program and receive your degree or certificate.

If you accept a “teach-out” to complete your program at your school or another school, you will be responsible for repaying all of your student loans. If you decline a “teach-out” offer and the school closes, you may not have to pay back your federal student loans.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about the CFPB’s work for students and young Americans, visit consumerfinance.gov/students.

Save the date, Milwaukee!

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Join us for a field hearing in Milwaukee on student debt. The hearing will take place on Thursday, May 14 at 10 a.m. CDT. The event will be held at:

Wisconsin Center
400 W Wisconsin Avenue
Milwaukee, Wis. 53203

The hearing will feature remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

This event is open to the public and requires an RSVP. Send us an email to RSVP. A live video will be streamed here on our blog.

If you need an accommodation to participate, you can make a request.

See you there!

Updated on May 8, 2015 to include the venue information.

Special announcement for Corinthian students

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Along with the U.S. Department of Education, today we announced more than $480 million in forgiveness for borrowers who took out Corinthian College’s high-cost private student loans. ECMC Group, the new owner of a number of Corinthian schools, will not operate a private student loan program for seven years and agreed to a series of new consumer protections.

As part of today’s announcement, we’re also releasing a special bulletin for current and former students enrolled at Corinthian-owned schools with more information. We urge you to read it carefully so you fully understand your options and obligations on your student loans.

If you experience difficulty with your student loan you can submit a complaint online or by calling (855) 411-2372. You can also find more information about options for repaying your student loan on our website.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young Americans, visit consumerfinance.gov/students.

Seeking answers for struggling student loan borrowers

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Thousands of borrowers have told us their stories on how they manage tough times with their student loans. Some students ended up borrowing much more than they expected in order to complete their degree, often because a parent lost a job in the midst of the financial crisis. Others had a tough time finding a job after graduation, making student loan payments difficult to afford.

Many borrowers have found help through income-driven repayment plans, where your payment is capped as a portion of your income. In the past year, more than one million student loan borrowers signed up for income-driven repayment plans on their Federal Direct student loans – an increase of 64 percent.

Too many private student loan borrowers are trapped

The private student loan market boomed in the years leading up to the financial crisis, where many lenders aggressively marketed loans and quickly sold them to investors. While these practices have subsided, too many borrowers with these loans find themselves out of luck and out of options. Unlike federal loans, most borrowers with private student loans don’t have flexible repayment options when they run into trouble. They report receiving very little information or help when they get in trouble, that there are no affordable loan modification options available, and that the alternatives to default are temporary at best.

Last year, Director Richard Cordray and Education Secretary Arne Duncan, along with senior officials from across the government, brought together the nation’s largest student lenders and servicers. We urged them to develop more options to help borrowers avoid default and increase the likelihood of full repayment.

Will student lenders and servicers make a deal?

Today, we’re asking several players in the student loan industry to find out what progress they’ve made. We’re looking to find out what loan modification options lenders and servicers provide, how customers can learn about their repayment options, and how borrowers can get approved. This effort also complements the work of the CFPB and our other regulators to help prevent repayment problems for future borrowers.

Borrowers across the country have told us that they aren’t looking to get off the hook, they just need a payment plan that they can afford. One borrower told us:

“I have no options left in regard to lowering my payment, forbearance, deferment or delaying my payments. I work full time as a teacher, but my student loan payment is more than a third of my income. My [specialty student loan company] just told me that there is nothing I can do but let my private loans go into default and to try to work something out with the collections agency. I have no qualms about paying a monthly fee that I can afford, but currently the money just does not exist.”

But many consumers have asked why their private student lenders won’t make a deal. After all, if lenders and servicers offered lower payments during a tough time, borrowers could avoid default and lenders could get fully repaid over the long run – a “win-win” for all.

In addition, several industry players have shared with us that they are willing to make deals with borrowers and will be launching new programs. But even today, many borrowers still have questions about these new repayment plans: What are the options? How do I enroll? Will other lenders offer similar repayment options?

The inquiry we are launching today can help us get to the bottom of these questions. Here’s an example of the information request that we’re issuing.

If you need student loan help today

If you’re in trouble today, check out our advice for borrowers. You can find a sample letter you can send to your student loan servicer to help get clear options – if they exist – on how to avoid default.

To learn more about other options when repaying private and federal student loans, check out Repay Student Debt. If you still need help resolving a student loan issue, like a surprise default or a payment processing mistake, submit a complaint.

When we hear back from the student loan industry on their efforts, we’ll be sure to update you.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young Americans, visit consumerfinance.gov/students.