STATEMENT: Higher Ed Not Debt on CFPB’s “Auto-Default” Report


April 22, 2014
CONTACT: Jamal Little

 STATEMENT: Higher Ed Not Debt on CFPB’s “Auto-Default” Report

Washington, D.C.—Today, the Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released a report highlighting complaints of “auto-defaults” in private student lending.

Maggie Thompson, Campaign Manager for the Higher Ed Not Debt Campaign, released the following statement in response:

“The CFPB’s report highlights one of the many predatory lender practices that plague the private student loan market.  With many companies now requiring a co-signer on private student loans and the cost of college rising without check, students and their need basic consumer protections that other borrowers enjoy.  Lenders should have clear practices in place to allow students to release their co-signers.

A student borrower in good standing should not be pushed into automatic default if their co-signer passes away or declares bankruptcy.  We applaud the CFPB for giving clear instructions to help borrowers and their families avoid the threat of auto-default.”

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