The Consumer Financial Protection Bureau (“CFPB”) took another step in addressing concerns about student loan servicing. Recently, the CFPB released a set of proposed disclosures, dubbed the “Payback Playbook,” intended to provide borrowers with clear information about their repayment options, particularly if they are facing financial distress. The CFPB is helping develop the Playbook for use by student loan servicers and is seeking input from the public on how best to convey that information.
The Government Accountability Office concluded last year that many eligible student loan borrowers do not know about, and so do not take advantage of, income- or earnings-based repayment plans for certain types of student loans. The CFPB, in coordination with the Departments of Education and Treasury, is working to ensure those borrowers have specific information about affordable payments options. The agencies anticipate that student loan servicers could provide the Playbook notices to borrowers on their monthly bills, in regular email communications, or when logging in to their student loan accounts.
The Playbook’s Features
The CFPB is suggesting that borrowers who are not at risk of default would get a version of the Playbook that describes three personalized repayment options. Borrowers who have missed a payment or are otherwise identified as being at risk of default would receive a different Playbook that provides a single repayment option and instructions.
Under both aspects of the Playbook, the goal is to describe clearly the borrower’s repayment options, including (i) the number of payments over the life of the loan, (ii) monthly payment amounts, and (iii) whether payments would change over time. The CFPB also intends that the Playbook would be updated for a borrower when and if the repayment options or his/her circumstances change.