NAICU Washington Update

CFPB Investigates Private Student Loan Lending

January 21, 2022

The Consumer Financial Protection Bureau (CFPB) announced that it will begin investigating private student lending at colleges and universities for compliance with federal consumer protection laws. The investigation will examine the actions that institutions offering private student loans take against students, including withholding transcripts from students who owe debts and preventing students from enrolling in classes if they are late on their loan payments. 

The investigation by the CFPB also sets the stage to look further into income-share agreements as part of its oversight of private student lending. The CFPB reached a settlement in 2021 with an income-share agreement provider in which it said for the first time that the alternate financing products meet the definition of a “private education loan” and are subject to federal consumer protection laws.

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