Posts Tagged ‘Consumer Financial Protection Bureau’

There is growing concern about the amount of student loan debt in the U.S, with the Consumer Financial Protection Bureau (CFPB) warning that more than $1 trillion is owed on outstanding loans.  The reason behind this record amount of student debt is tied to the rising cost of college and the increase in college enrollment.

While a college degree is still a worthwhile investment, the debt today’s graduates accumulate can impede their financial stability for decades after they leave school.  In fact, it can leave many young people with the impression they can’t afford to take a job in public service, such as teaching, because it doesn’t offer a salary high enough to pay off their loans. This reality drives talent away from public service, and is one of reasons the CFPB 09-26-12-Student-Debt-00-01 and others are trying to raise awareness of loan repayment and forgiveness options (See: Public Service & Student Debt).

According to the CFPB, the cost of attending a public university in the U.S. has increased 42% in the last ten years, and for private universities the cost rose 31% for the same period.

Yet even in the face of rising costs, more people are attending college.  In the last 20 years, college enrollment has risen from 13.8 million to 21 million.  Pew Research now estimates 19%, or one out of five, American households owe outstanding student debt as of 2010.

As worrying as the cost of a college education may be, there is still value in it.  Last year (more…)


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A new study by the Consumer Financial Protection Bureau (CFPB) should catch the attention of anyone advocating for stronger regulation of the payday loan industry and deposit advances.  Initial findings were recently released under the title Payday Loans and Deposit Advance Products.  According to CFED, it is one of the most comprehensive studies conducted on the subject so far, as it included data on millions of borrowers.  As stated by CFPB Director Richard Cordray, the study shows common industry practices put consumers at long-term financial risk and often cfpdserve as “debt traps” instead of a simple short-term, emergency loan.  The individual who borrows the money may find it necessary to take out another loan to pay off the first, and it creates a cycle of indebtedness.

Today’s blog post will concentrate on the payday lending portion of the report.  As the name suggests, payday loans are often due by the borrower’s next pay period.  These loans exploit a considerable number of low-income borrowers who lack the cash flow to quickly dig themselves out of short-term loan as the extra fees quickly accumulate.  The average annual income for a borrower was found to be $26,167, but a quarter of borrowers report an annual income of $14,172 or lower.  Three quarters of those borrowing money were employed full- or part-time, and the rest had fixed incomes due to retirement, disability or other assistance.

Borrowers are often repeat customers, (more…)

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