The Consumer Financial ProtectionBureau’s forthcoming “Payback Playbook” intends to simplify the student loan repayment process by presenting clear, customized repayment options.
In April, the agency offered a sneak peek. The initiative will provide borrowers with simple repayment plan options any time they log into their student loan account. The Playbook summary will also be included with their monthly loan bills or in regular emails from their student loan servicers.
Alongside basic details of the borrower’s active repayment plan, the Playbook displays comparable details for other repayment options, such as a graduated or income-driven plan. Borrowers can see all their options in actual dollar amounts.
“It’s almost against conventional wisdom, but borrowers need less, yet better consumer information,” says JustinDraeger, president of the National Association of Student Financial Aid Administrators, adding that it’s good to get specific information like this in front of them.
About 43 million Americans have student loan debt, totaling an estimated $1.3 trillion. More than 10 percent of all student borrowers end up in default within three years of leaving school, according to the Government Accountability Office.
Prototypes of the Payback Playbook are available at www.consumerfinance.gov through June 12. Although the repayment information will be provided by loan servicers, the Consumer Financial Protection Bureau (CFPB) is seeking feedback from financial aid administrators.
Valid critique can be made about student loan repayment, but the Playbook represents progress, Draeger says. “The Department of Education and the CFPB are trying to take meaningful steps, like this, in the right direction.”
