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A New Voice for Students

If you are a student, the last thing that should be on your mind in the classroom is how you are going to make ends meet over an unexpected credit card fee or a looming loan payment.

As the cost of college continues to rise, you may be one of the increasing number of students turning to debt to pay for your education. Many are relying on loans from private lenders that often lack the clear terms, fixed rates, and flexible repayment options of federal student loans. According to the Project on Student Loan Debt , nearly 1.5 million students now graduate with student loan debt each year, leaving school owing an average of $24,000 – a debt increase of about 25 percent since 2004.

In addition, credit card debt among college students has expanded considerably in recent years, with 84 percent of undergraduates owning at least one card. A study by Sallie Mae revealed that the average student now has at least four credit cards and will graduate with $4,100 in credit card debt. Only 17 percent of students say they regularly pay off all cards each month. This means that most students may be adding hundreds – even thousands – of dollars to their credit costs. And, if your credit history is dinged right out of the gate from missed payments or high debt levels, it could mean higher prices for credit down the road.

Here at the Consumer Financial Protection Bureau (CFPB), we aim to be a new voice for students. We are creating an office for students to provide you with tools for you to make the best decisions about credit.

We are already moving in the right direction. The Dodd-Frank Act, which President Obama signed into law in 2010, paved the way for the CFPB to assist students by examining providers of private student loans. In the coming months, we look forward to hearing from you about your experiences with and concerns about paying for your education with private student loans – and about how we can best help you.

Student consumers will also benefit from the CFPB’s enforcement of bans on arbitrary rate hikes on existing credit card balances and other harmful credit card practices. These consumer protections were part of a law signed by President Obama in 2009. The consumer bureau also will enforce that law’s special new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing of credit cards to students.

Additionally, the CFPB aims to help make the costs and the risks of credit products clear up front. If the costs and risks are clear, some students may respond by financing less of their education, using different credit products to do so, or decreasing their use of credit cards to pay for personal expenses. Others may go the other way, taking on a student loan or using credit to help with monthly expenses, confident that they understand the terms of the deal and can manage their obligations responsibly. In any case, clear information about prices and risks will help all students better sort through possible credit options.

This week, we are pleased to focus on these and other issues as we join 26 Federal agencies and partner organizations observing National Consumer Protection Week. National Consumer Protection Week gives us a chance to celebrate this important work and to find new ways to empower student consumers across the country.

You can get involved right away by visiting our main National Consumer Protection Week page, or using the #NCPW hashtag on Twitter to talk about what you’re doing this week to become a more informed consumer.

William Sealy is a member of the CFPB outreach team.

Join the conversation. Follow CFPB on X (formerly Twitter) and Facebook .