ICFE eNEWS #17-01 - January 9th 2017
CFPB Releases Report on Student Loan Debt
Owed by Older Consumers
The Consumer Financial Protection Bureau (CFPB) has released
a new report, "Snapshot of older consumers and student loan
debt," that provides statistics on the growing number of consumers
age 60 and over (older consumers) who owe student loan debt and
the growing amount of such debt. The report also discusses complaints
about student loan debt submitted by older consumers to the CFPB
from March 2012 to December 2016. According to the CFPB, the report
can offer insight to policy makers examining "potential changes
to the higher education finance market, including changes to federal
student loan programs," as to "how changes in the availability
of borrowing and repayment options may affect the long-term financial
well-being of older consumers."
The report includes
the following statistics:
• The number of older consumers with
student loan debt quadrupled from 2005 to 2015, increasing from
about 700,000 to 2.8 million consumers.
• The average amount
of student loan debt owed by older consumers roughly doubled from
2005 to 2015, increasing from $12,100 to $23,500, with older consumers
owing a total of $66.7 billion in student loan debt as of 2015.
• Based on the CFPB's analysis of survey data, 73 percent of older
student loan borrowers (which appears to include co-signers) report
that their student loan debt is owed for a child's and/or grandchild's
• The proportion of delinquent student loan debt owed
by older consumers increased from 7.4 percent to 12.5 percent from
2005 to 2012, with 37 percent of student loan borrowers age 65 and
older in default in 2015.
• The number of borrowers age 65 and
older who had their Social Security benefits offset to repay a federal
student loan increased from about 8,700 to 40,000 borrowers from
2005 to 2015.
The report indicates that as of January 1,
2017, consumers 62 and older submitted approximately 1,100 student
loan complaints and approximately 500 debt collection complaints
related to student loans. (Based on the CFPB's December 2016 complaint
report, the CFPB has received a total of 33,713 student loan complaints
since July 2011. The report did not break out the number of debt
collection complaints that were related to student loans.)
According to the CFPB, issues described in complaints submitted
by consumers 62 and older included the following:
practices that delay or prohibit enrollment in income-driven repayment
(IDR) plans or limit the consumer's ability to reduce his or her
monthly payments when the consumer's income changes, such as the
servicer not advising the consumer about the ability to have monthly
payment amounts reassessed under an IDR plan when income is reduced
• Misallocation of co-signer payments to other loans owed only by
the primary student borrower which may cause the co-signer's payment
to appear short and result in late fees and interest as well as
reporting of late or missed payments to consumer reporting agencies
• Difficulties in obtaining a co-signer release or accessing account
information needed to monitor the account
• Offset of the consumer's
Social Security benefits following a default on a federal student
loan despite the consumer's right under federal law to make income-based
payments to rehabilitate the loan
• Threats by debt collectors
to collect on federally-protected benefits to repay private student
The report includes several suggestions and recommendations
• Review of the co-signing process for private student
loans "to understand whether the origination process fully
brings to the attention of older co-signers that they are taking
on liability for the debt"
• Streamlined access to IDR plans
for older borrowers whose only source of income is Social Security
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Also, visit the ICFE's new Web site: StudentDebtHelp.org
Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.