The Consumer Financial Protection Bureau (CFPB) yesterday issued a series of proposals to create more flexible repayment plans for the millions of Americans struggling with private student loans, the Washington Post reported today. Such loans, which are offered by banks and other financial firms, account for $150 billion of the $1 trillion in outstanding student loan debt, but they have come under increased scrutiny. To ease the burden on borrowers, the CFPB said that those who pay on time should be able to refinance their debt at lower interest rates. Borrowers who fall behind should have access to income-based repayment plans, it said. The CFPB urged lenders to implement those recommendations. In addition, it said that policymakers should help those with private loans by replicating for them the rehabilitation program available to those with federal student loans, which helps people exit default and repair their credit.
