Planned changes for student loan watchdog fuel fears of dwindling protection from CFPB
Here's an important warning for anyone with student loan debt.
Be very careful about where you go for repayment assistance. For that matter, be careful about where you go for a student loan in the first place, especially if it's a private loan.
The concern is over new plans to eliminate the student loan watchdog office at the Consumer Financial Protection Bureau, or CFPB.
The federal office is supposed to protect you against financial industry abuse, but many worry a change could leave college students and grads defenseless against student loan predators.
College grad Amanda Martin is preparing for the worst.
It's been three years since Martin finished college and landed a full time job. She says she still has a lot of student loan debt.
"I remember when I was applying for college and getting my financial aid packets, you know, it's, you're so excited to go to college and you're only thinking about, 'how do I pay for school?' You're not thinking about what happens afterwards," said Martin.
Fortunately Martin has done her homework, both about the kinds of loans to avoid, and the best way to get student loan repayment relief - if she ever needs it.
"Luckily I know where to look,"Martin explained.
That's because Martin graduated as an attorney. She works at the Northwest Consumer Law Center in Seattle.
Martin and her colleagues say if you're having problems keeping up with student loan debt - be very careful.
"There's a lot of misinformation out there about the repayment plans," said Martin. "And students aren't always finding out what their options are for those."
Another problem is predatory student loan servicing.
The company that services your loan might, or might not give you complete information about your options, and the financial consequences of your choice.
For example, they may help you arrange to temporarily stop making payments on your student loan, a practice known as forbearance - without telling you that you'll have to pay the total of the missed payments as soon as the temporary grace period ends.
Always educate yourself before you take out a student loan or make a decision to contact any company offering student loan repayment help.
Check check the Student Loan Borrower Assistance website
This non-profit website has valuable information about student loans, loan servicers, and repayment options for both federal and private student loans.
Review all the options as well as the potential pitfalls.
Document all loan servicing conversations, including names, numbers and dates. Save every email.
And never agree to anything until you get it in writing. Never make a verbal decision over the phone, and don't agree online until you fully understand everything and have compared all the options.
"They have to do their research beforehand, and know what they're getting in to," Martin stressed. "Because without the protection of the CFPB, these students are going to be left to have to seek their own help."
Martin urges anyone who feels they've been victimized by deceptive or predatory student loan practices to file a complaint with the state Attorney General's office, the Federal Trade Commission and the CFPB. Consider consulting with a consumer law expert to see if they can help.
Since it was established, the CFPB's student loan office has returned more than $750 million to students from companies accused of predatory practices.
Martin and other consumer advocates fear that kind of regulation and enforcement could soon end and urge people struggling with student loan debt to contact the CFPB and make their voices heard.