Wednesday, October 26, 2011

Students Ask For a Strong Consumer Financial Protection Bureau to Protect Them from Unfair Financial Practices

Special Advisor to the U.S. Treasury Secretary on the CFPB, Raj Date with MSUSA state chair, Amanda Bardonner and MSCSA president, Geoff Dittberner.

The Minnesota State College Student Association and Minnesota State University Student Association joined together to call for clear rules and strong enforcement in private student lending. Private student loans cost more than federal loan options, often times charging higher rates and including less favorable terms. While banks may market these products at interest rates lower than those of federal student loans, they charge higher rates to over 75% of borrowers— often those with the most financial need. 

Geoff Dittberner, President of the Minnesota State College Student Association explains, “Some students take out private loans because they are not aware of their federal loan options, or believe they won’t qualify.  In fact, the majority of private loan borrowers in 2008 borrowed less than they could have qualified for in more affordable federal loans.”

Amanda Bardonner, State Chair of the Minnesota State University Student Association went on to say, “Minnesota students and families need to trust financial institutions and feel secure in their borrowing choices.  Today 's students will not be tomorrow's homeowners, investors or entrepreneurs if this country continues to allow companies to take advantage of them as they become consumers.”

We believe the Consumer Finance Protection Bureau can help curb deceptive and aggressive marketing practices that drive students to take on unmanageable private loans. The bureau can scrutinize current bank practices and help ensure students know how to access and exhaust more affordable federal loan options first.  Regulations can also promote financial literacy among students and families as they make important college finance decisions

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