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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. Here is 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 if you apply for a loan discharge.

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.

You may have to pay income taxes if you get your student loans discharged when your school closes. If you don’t think you can afford to do so, you can petition the IRS to reduce your tax bill. Contact the Office of the Taxpayer Advocate to learn about your options.

If you have private student loans

Generally, if you have private student loans, you will 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.

Building a collection of financial education materials for a library near you

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We want to make libraries the go-to place for financial information in every community. And so far, we’ve been met with tremendous enthusiasm – from other government and nonprofit agencies, by library associations and administrators, and by librarians themselves. That’s why we’ve put together resources and materials for libraries to use in their community.

We started this project about a year ago by listening to a group of nine librarians who agreed to work with us. After we announced the initiative in April, the number of libraries that wanted to participate swelled to nearly 50 library systems. Last week, we announced a partnership with Rhode Island’s Office of Library and Information Services, our first partnership with a state-wide impact, increasing our reach to more than 100 library systems. More importantly, these 100 systems have more than 450 branch locations that receive more than 76 million visits a year.

Why libraries?

Libraries are highly trusted in virtually every community and eager to serve more people in their neighborhoods. They’re also unbiased, so they provide a safe place to research financial options, decisions, or solutions to problems.

In 2010, libraries served 297.6 million Americans. And despite shrinking budgets, hours, and staff, attendance at library programs is increasing. Recent surveys also indicate that parents and low-income individuals view libraries as important resources. About one quarter of the people who use library computers log on for commercial needs or to manage their personal finances.

Started by listening

So we gathered nine public libraries – some that had conducted highly innovative financial education programs in the past and some that had never done financial education before. We asked them: “What could we do to help you do more financial education? What are your constraints, limitations, and needs?”

We also surveyed more than 700 library patrons. We asked them if they would go to the library for this information, what they thought of libraries, and what types of programs they’ve attended in the past.

Ready to roll

Now we’re rolling out our first set of program ideas, online resources, and free government publications that librarians can order in bulk.

We’ve also created a guidebook to help librarians find and develop relationships with other organizations in their communities that can help present or support financial education programs.

We’re working with the American Library Association and other library associations and organizations to spread the word about financial education best practices and engaging program ideas.

It’s important to note, too, that this is the starting line, not the finish line. We’ll continue to add and update resources, publications, and partners. So check back with us often and watch us grow!

If you’re a librarian and are interested in getting involved, send us an email.

We participated in the National Day of Civic Hacking (again)

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Coders, technology enthusiast, economist, teachers, high school students, and entrepreneurs joined representatives from more than seven government agencies for the second annual National Day of Civic Hacking from May 31- June 1. The event was locally organized and held in Washington, D.C. to confront complex societal problems affecting our neighborhoods, communities, and country.

During the event, we participated and watched representatives from traditionally disconnected groups work together on some of the most pressing issues facing the local and federal government. We asked participants to analyze our public Consumer Complaint Database and our Home Mortgage Disclosure Act Database.

The challenge

We challenged the participants to come up with ways to empower consumers by building tools and visualizations using two of our databases: our consumer complaint database and our HMDA database. Since the launch of the complaint database in June 2012, the number of consumer complaints has increased rapidly, surpassing the 300,000 mark earlier this spring. The breadth of the database now includes complaints on seven categories of products, ranging from credit cards to mortgages. Further, the HMDA database contains 6 years’ worth of mortgage transaction data, approximately 112 million records. Together, these two data sets provide a strong and open foundation for the public to generate interesting data analysis and application.

During the event, we were able to answer questions from civic hackers interested in using the data to build visualizations and applications. Local students Andy Zhao, Derek Zhou, Joe Zhou, Joie Wang, Kyle Zhou, and Rachel Wu, used our publicly available data to build a visualization tool that demonstrated which products, issues, and companies consumers are complaining about, as well as the cities and towns where complaints are most prominent. Druv Sharma, Hui Hung Martin Dertz, and Neisan Massarrat, used the HMDA data to build maps that illustrate lending patterns with respect to gender. This is exactly the type of involvement we’re hoping for and illustrates the opportunities we have to expand this type of public engagement.

What’s next?

We hope to connect with other communities interested in engaging with our databases. We believe there are opportunities for coders, developers, and others with strong technical prowess to build innovative tools and applications that can enable consumers to live better financial lives.

Got a cool data project to share? Just tweet at @cfpb with #CFPBdata.

Now recruiting: Technology & Innovation Fellows for 2015

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We’re excited to announce applications are now being accepted for the next round of CFPB Technology & Innovation Fellows. The fellowship is a two year program for software developers, graphic and user experience (UX) designers, data specialists, and cybersecurity professionals interested in leveraging technology to help further our mission of making financial products and services work for consumers.

We’re looking for talented individuals with diverse backgrounds who embrace our mission and are excited about building technology and helping to build our organization. We expect the next group of fellows to begin work in January 2015.

Since the program launched two years ago, fellows have been hard at work applying their talents to build amazing things to help financial products and services work for consumers. Today, I’m proud to share with you some of their work.

Fellows have been instrumental in creating and building:

Looking ahead, the next round of fellows will continue to build on these accomplishments as well as tackle new projects in areas such as building software for our website, developing consumer-friendly tools and materials, and supporting agency cybersecurity functions.

Technology and innovation are fundamental to our ability to achieve our consumer protection mission. If you’re ready to serve the public and help us build amazing things, apply now or sign up here.

Want to learn more? Check us out on GitHub or GitHub.io to learn more about the web applications our current fellows have developed and check out our Design Reel to see how current fellows have improved the ways consumers interact with the federal government.

We’re helping long-term care facilities protect older Americans from financial exploitation

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We’ve heard a lot of stories about vulnerable adults falling prey to con artists, family members, fiduciaries, and professional advisers who steal their nest eggs and threaten their financial security.

A son steals $315,000 from his elderly mother’s retirement accounts and frequents casinos. When he doesn’t pay his mother’s rent, she’s evicted from her assisted living facility.

The pastor of a 77-year-old man with Alzheimer’s and Parkinson’s diseases makes 130 withdrawals from the man’s bank account but fails to make nursing home payments on his behalf for nine months. The man was nearly discharged from his nursing home.

These stories are all too common. We’d like to equip assisted living and nursing facility staff with the know-how to prevent and spot the warning signs of abuse, so we’re releasing a guide to protecting residents from financial exploitation.

Our action-oriented guide gives staff the tools to:

  • Prevent financial exploitation and scams by educating staff, residents, and family members about warning signs and precautions
  • Recognize, record, and report financial abuse as early as possible using a model protocol and a team approach
  • Get help from first responders in the community

What you can do

If your family member or friend lives in an assisted living or a nursing facility, share this manual with the administrator and professional staff. You may want to read it as well to learn some of the signs of financial exploitation and where to go for help.

Some signs of abuse

Here are some warning signs that a long-term care resident is being financially exploited or abused:

  • Possessions disappear from a resident’s room or apartment
  • Resident pressured to make a decision or sign a document “now”
  • A previously uninvolved person claims authority to manage a resident’s care and/or finances but does not provide documentation
  • Unpaid facility bills
  • Resident’s checkbook or check register shows checks made out to “cash” frequently or check numbers out of sequence
  • Frequent or costly gifts to facility staff or volunteers

Order your free single or bulk copies of the guide to protecting residents from financial exploitation.

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