The Consumer Financial Protection Bureau fears that the rising debt from student loans could begin to significantly affect the economy, and is calling for more flexible repayment plans for the millions of Americans struggling with private student loans.
After studying nearly 28,000 comments from consumers and organizations, the CFPB concluded that the high debt attributed to these student loans will eventually delay the economic activity of the borrowers, diminishing their chances to start businesses, purchase new cars or homes, or save for their retirement.
These private loans have more restrictions than government loans and do not have refinancing options or other help.
The CFPB says that those who pay on time should be able to refinance their debt at lower interest rates. In addition, the Bureau feels income-based repayment plans should be available to those who fall behind.
It is also urging policymakers to assist those with private loans by helping people repair their credit, similar to the rehabilitation program that is available to those with federal student loans.