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Reminder: Sound off on our student loan affordability initiative


A few weeks ago, we announced that we’re gathering information to identify policy options for borrowers to find affordable options on their private student loans.

In that short period of time, we’ve received over 20,000 responses from individuals and organizations telling us what could be done. We’ve already posted many of the responses online – take a look.

Here’s a couple of the issues and ideas that have been submitted:

Refinance products and the capital markets: A number of participants, including a publisher of websites on financial aid and a start-up CEO, described how there may be significant demand for credit-worthy borrowers to refinance their loans and lock-in lower rates, but creative lenders face hurdles in the capital markets to fund loans. Individual borrowers have also described how the lack of refinance options impacts them.

Government-sponsored programs to promote affordable loan repayment: Many participants have talked about income-based repayment, and two separate think tanks discussed creating programs and capital vehicles to modify loan terms so borrowers can get affordable payment plans.

Impact on professions: A number of participants talked about how student debt affects their profession. For example, a medical student wrote about the inability to get a lower rate. A physician assistant serving veterans talked about the difficulty staying in public service. A school district official wrote about how the lack of repayment options on private student loans impacts teacher retention. A mortgage loan officer talked about the impact of student loans when qualifying for a mortgage.

This is just a small sample of the input we’ve received – we know there’s even more out there. Submit your ideas and input online by April 8, 2013.

  • R. Gaudio

    Repayment of student loans has become prohibitive. As a nation our educational status has been declining compared to many industrialized countries in the world. I believe a big part of it has to do with the unaffordabillity of getting a higher education. Graduates are faced with huge loan debts and few or low paying employment opportunities. Their futures are living in poverty trying to repay the loans, or defaulting on them. Either way, there are major disincentives to getting a higher education in this country. Why can’t the government issue and/or encourage low, simple interest loan rates (say, 3% simple interest). This way students are not burdened with high (8 – 8.5%) loans compounding over 10 to 20 years. Knowing that education can be truly more affordable may encourage more students to pursue a higher level of education without the fear of overwhelming debt when they graduate.

  • Justin R.

    I think we simply need to restore bankruptcy protections to private student loans. The value of a college education has simply decreased and some college graduates in certain metro areas simply can’t find jobs that have salaries high enough to make the minimum payments. Ensuring bankruptcy protection will also give an incentive to banks to work with lenders, through programs such as income based repayment and forbearance.

  • Muhammad Usman

    Student loan has just become famous in foreign world.

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