Senate Committees Hold Hearings on Student Loans

more+
less-

In the wake of recent focus on student loan debt, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on the “Student Loan Servicing: the Borrower’s Experience.” The concern shown in some testimony at the hearing suggests that there may be a push to regulate the student loan industry. Several individuals were invited to speak including, a college financial aid director, a local teacher and the Student Veterans of America. Similar to the CFPB’s concern, many of the witnesses testified on the impact of student loan debt on borrowers. The witnesses proposed, among other things, having only two repayment options: standard and income-based, that servicers be required to give notice of servicing transfer similar to mortgage servicing transfers, and numerous proposals around SCRA-protections (e.g., requiring automation for determining active duty service and SCRA-protections and no loss of SCRA-protections in refinancings and consolidation).

At a competing hearing, the Senate Budget Committee held a hearing on the “Impact of Student Loan Debt on Borrowers and the Economy,” in which the Assistant Director at the CFPB testified. The Assistant Director raised similar concerns as those raised in the Senate Committee on Banking, Housing and Urban Affairs. In particular, the Assistant Director at the CFPB discussed the impact of student loan debt on small business and entrepreneurship and health care and education—noting that student loan debt could “skew labor market outcomes.” The Assistant Director also raised issues in student loan servicing and refinancings of student loans.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

 

Topics:  Administrative Hearings, Borrowers, CFPB, Loan Servicer, Senate Banking Committee, Student Loans

Published In: Consumer Protection Updates, Education Updates, Finance & Banking Updates, Military Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Goodwin Procter LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »