The CFPB released an updated report on private student loans and a summary of the updates. The revised report was issued after the CFPB received feedback from researchers and industry participants. The updated report refined results in two areas: (1) the extent to which private student loan borrowers have exhausted their federal loan options, and (2) the extent to which private student loans were originated without certification of the borrower’s need by the college or university. For example, the updated report shows that a higher percentage of students did not exhaust their federal loan eligibility. In particular, the percentage increased from 40% to 54.5% after the CFPB decided to include students who chose not to obtain Stafford loans. The updated report also includes a log of changes and the reasons for each change.
The release of the updated report coincided with remarks given by the CFPB’s Student Loan Ombudsman, Rohit Chopra, to the Congressional Forum on Student Loans. Mr. Chopra addressed the rising student loan debt and identified three lessons for the student loan market gleaned from the mortgage market crisis: (1) aligning incentives, (2) spurring refinance and (3) ensuring adequate servicing.