Dodd-Frank News Center

CFPB blog post addresses challenges of servicemembers with student loans

This story appeared in Bank Digest.                                   

Consumer Financial Protection Bureau Student Loan Ombudsman Seth Frotman and CFPB Assistant Director for the Office for Servicemembers Affairs Paul Kantwill have written a blog post addressing some of the challenges servicemembers with student loans face. According to the post, servicemembers sometimes have difficulty accessing protections like Public Service Loan Forgiveness and getting into income-driven repayment plans.                                  

Instead, student loan servicers sometimes "steer them toward options like military deferment or forbearance," which provide short-term payment relief but "can increase the overall cost of student loans and delay access to loan forgiveness options available through IDR or PSLF."                                   

The post describes certain rights military borrowers may have, such as eligibility for interest rate protections on loans taken out before they entered military service and having the balance of their federal student loans forgiven after 10 years of working in public service.

Measure introduced to extend foreclosure protection for military homeowners

This story appeared in Bank Digest.

To prevent a pending expiration of foreclosure protection for military homeowners, Reps. Stephen Fincher (R-Tenn) and Denny Heck (D-Wash) have introduced the Stability for Servicemembers Act. Currently, the law protects servicemembers from foreclosure for one year after they leave active duty, but it is set to expire at the end of 2014. The Stability for Servicemembers Act extends the one-year foreclosure prevention measure through Dec. 31, 2015.