Miller Statement on New Private Student Lending Report
WASHINGTON – Rep. George Miller (D – Calif.), the senior Democrat on the House Education and the Workforce Committee, issued the following statement today after a new joint report from the U.S. Department of Education and the Consumer Financial Protection Bureau (CFPB) found that students were another group of consumers who were adversely affected by the boom and bust of the subprime lending financial crisis. The report found that risky lending practices and loose underwriting has resulted in more borrowers and more debt in the private student loan market in the past ten years.
“I thank Secretary Duncan and Director Cordray for conducting this important study.
“With more Americans turning to loans to pay for college in this economy, there’s a growing need to protect students from financially riskier private student loans and predatory lending practices. Private student loans remain far more expensive for borrowers and often carry tricky terms and conditions. Congress has a responsibility to ensure that students who take out private loans are provided at least the same basic protections as when they use their credit cards, or buy a car. And we must ensure that students take full advantage of federal student aid before turning to private loans.
“I look forward to working with the Department of Education and CFPB to ensure that students who take out private loans are not buried under a mountain of debt for years to come.”
Unlike federal student loans, which have a cap on interest rates and can have flexible repayment options for borrowers, including an Income Based Repayment program authored by Miller, private student loans have no interest rate cap and no cap on the total amount a student can borrow.
For more information on steps past Democratic Congresses have taken to make college more affordable and help students manage their loans, click here.
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