WASHINGTON (7/2/13)--The federal student loan rate, which was set at 3.4%, doubled for future loans to 6.8% on Monday. While the U.S. Congress did not take action to avert this increase, it can still address the problem when members return from the July 4 recess next week.
Student lending issues are on the minds of many, and details of a private Senate Banking Committee hearing on private student loans held last week are included in this week's edition of the Credit Union National Association's Regulatory Advocacy Report.
During that hearing, lawmakers told banking regulators they are concerned about access to student loans and mounting debt problems facing college students. A major point of contention was banks' ability to provide workouts for distressed borrowers and whether banks can offer flexible repayment options. The regulators indicated that banks were free to offer borrowers flexible repayment options.
However, the Regulatory Advocacy Report noted, accounting standards and a lack of regulator guidance prevent many credit unions and banks from offering robust repayment options.
The Federal Deposit Insurance Corp. has indicated that it will be releasing private student loan guidance soon. CUNA is hopeful that the National Credit Union Administration will also address issues of repayment modifications in the near future.
Other items addressed in this week's Regulatory Advocacy Report include:
Employees or volunteers of CUNA- and state credit union league-member credit unions can sign up below to receive the Regulatory Advocacy Report.
The Regulatory Advocacy Report is archived on cuna.org.