Banks Ease Terms for Struggling Student Borrowers

Big banks are beginning to cut some slack to distressed student-loan borrowers. Wells Fargo announced a new program this week that will lower the interest rate on loans so payments will be more affordable based on a struggling borrower’s income. The bank will review borrowers’ financial situations to determine whether they qualify for short- or long-term loan modification. >> 8 Hidden College Expenses According to the Wall Street Journal, both borrowers and cosigners will have to show financial hardship to get a modification. Modifications …

Your Biggest Gripe: Debt Collectors!

The Consumer Financial Protection Bureau gets more complaints from older Americans about debt collectors than any other issue. According to a report released Wednesday by the CFPB’s Office of Older Americans, the agency received 8,700 debt collection complaints in the past 15 months. Consumers complained that debt collectors: – Try to collect the debts of dead relatives — even years after the estate has been settled. – Threaten to garnish Social Security and other federal benefits, which they can’t legally do. – Attempt …

Are Lenders Driving Student Loan Borrowers Into Default?

Borrowers struggling to repay private student loans say they have little choice but to default because lenders won’t revise payments to make them affordable, according to a new report by the Consumer Financial Protection Bureau. “We are hearing from consumers that they are driven into default because private student loan companies are not providing concrete loan modification options,” CFPB Director Richard Cordray said in a statement. “Struggling private student loan borrowers are finding themselves out of luck and out of …

Unpaid Student Loans May Impoverish Older Americans

Though a small percentage of older Americans carry student loans, those who do are incurring this debt faster, have a higher default rate and, as a result, can find themselves living in poverty in retirement, according to a new report from the U.S. Government Accountability Office. While older citizens are more burdened by mortgages, auto loans and credit-card debt, student loans among this age group are a growing concern. And unlike young borrowers who have many working years ahead of them to repay, older …

Payday Lender Ordered to Pay $10 Million Over Collection Practices

Ace Cash Express, one of the nation’s largest payday lenders, has agreed to pay a $10 million settlement over its collection practices. The Consumer Financial Protection Bureau said that Ace, based in Irving, Tex., must refund $5 million to customers who fell victim to such practices from March 2011 to September 2012; it must also pay a $5 million civil penalty. Payday loans are taken out by people who need quick cash between paychecks. Companies such as Ace Cash Express have been known …

President Makes It Easier to Repay Student Loans

Just as the Federal Reserve Bank of New York is raising concern about growing student loan debt and defaults, President Barack Obama is moving to expand a repayment program aimed at helping lower-income borrowers. The president today signed an executive order that the administration says will allow nearly 5 million more borrowers to qualify for a program that keeps monthly payments on federal loans to no more than 10 percent of discretionary income. This plan has been available only to more …