The Consumer Financial Protection Bureau announced yesterday the "Payback Playbook"—a set of prototype disclosures that outline a path to affordable payments for borrowers trying to avoid student debt distress. The CFPB explained that Payback Playbook provides borrowers with personalized information about their repayment options from loan servicers so they can secure a monthly payment they can afford. The Payback Playbook would be available to borrowers on their monthly bills, in regular email communications from their student loan servicers, or when they log into their student loan accounts.
According to the CFPB's press release, about 43 million Americans owe student loan debt, with outstanding debt estimated at $1.3 trillion. One out of four student loan borrowers are currently in default or scrambling to stay current on their loans, despite the availability of income-driven repayment options for the vast majority of borrowers. According to a government audit, 70 percent of federal Direct Loan borrowers in default earned incomes low enough to qualify for reduced monthly payment under an income-driven repayment plan.
The CFPB press release is here.