Photo: Alex Kissack via flickr
If you think the housing market is frightening, wait until you read the student loan horror stories flooding the Consumer Financial Protection Bureau’s website today.The consumer watchdog has ramped up its efforts to crack down on private student lenders and has put out an open call to students and graduates to share their experiences—the good, the bad, and the tragic.
With emotions ranging from rage to desperation, they clearly point to the need for financial reform in the private lending sector.
Here’s a sample of the comments posted so far:
“I am a victim of a for-profit school that sold me a private student loan that I cannot afford to repay,” says Nick Keith, who was approved for a Sallie Mae loan to attend culinary school. “My private student loan … has been in default for some time, and the balance due is nearly three times the amount that I borrowed. After working in the culinary field for almost two years, I was injured at work and became permanently disabled in 2007 … I have no means to pay my student loans.”
Another commenter named Sonia writes: “I have student private student loans through Sallie Mae. My original debt started at 56K. My loan has already grown to 76K (due to the 14K and growing capitalised interested.”
The point of the CFPB’s open call is to gather public input on the lending process, according to a letter written by Rick Hackett, assistant director for instalment lending markets.
“We’d love to hear from students, families, school counselors, lenders, servicers, and anyone who has anything to do with private student loans,” Hackett wrote. “The goal is to have all the facts as we prioritise what we do to make sure that the market works for students, lenders, and schools.”
If you have a story to share, sound off on the CFPB’s message board.
Before you drown yourself in loan debt, click here to see why community college might be a better option >