Next to a home, a college education can be the most expensive purchase one makes in a lifetime. And like many people who took out mortgage loans before the Great Recession, a growing number of borrowers are struggling to pay off student loans that were originated by private lenders in the mid-2000s.
According to a report on private student loans released by the Consumer Financial Protection Bureau, some private student lenders misled borrowers about their loan terms as well as their federal student loan options, and since 2008, student loan debt has increased and default rates have escalated. The report lists the total amount of outstanding private student loan debt in the U.S. as more than $150 billion and cumulative defaults on private student loans as more than $8 billion.
Among several recommendations the CFPB and Secretary of Education made to Congress in the report is to consider allowing private student loans to be dischargeable in bankruptcy. Since 2005, the government has not permitted discharging private student loans in bankruptcy except in cases of undue hardship, the CFPB said.
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Natasha Chilingerian
Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.
