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CFPB Announces Examination of Colleges Extending Private Loans Directly to Students

  • The CFPB announced it will begin examining the operations of post-secondary schools, including for-profit colleges, to review their practices in extending private loans directly to students.
  • According to the CFPB, school loan programs will be examined to identify potential abusive practices, including placing enrollment restrictions on students who are behind on loan payments, withholding academic transcripts due to debt, improperly accelerating payment schedules, failing to issue refunds, and maintaining improper preferential relationships with certain lenders.
  • The CFPB issued an updated Education Loan Exam Procedures Manual that includes a new section on institutional student loans to examine the potentially abusive actions or practices these schools take against their student loan borrowers.