The “Consumer Financial Protection Bureau (CFPB)” was formed by the government of the United States. It is an agency that is in charge of protecting consumers in the financial sector. The company has shown great concern for student loans. The increasing higher education costs, the crisis in the financial sector, and the enduring tough economic times imply that many students will depend on the acquisition of loans to pay for their tuition fees to make ends meet while they are still studying. According to the agency, students should have the ability to comprehend the costs, benefits, and the risks of the loans they will utilize to assist in paying for their studies.
Is there a hidden agenda?
There is no hidden agenda when the CFPB is concerned with student loans. Student loans are one of the country’s largest market for consumer debt and this has become a concern to the state. Over the years, the demand has increased rapidly and raised alarms. The agency is trying to create a balance where students can apply for higher education loans and also have enough time to repay the loans. Students have complained that there are long processing delays and dishonorable rejections by their servicers of student loans. Such denials and delays can lead to a rise in interest charges and lost eligibility for specific federal protection and benefits. Therefore, there is a need to repair the situation, which the CFPB is currently trying to do.
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Name a group that will support this policy.
American Student Association of Community Colleges will substantially support this plan. The group acknowledged that student borrowers experience more problems in the University marketplace than should be allowed. The group is concerned that taxpayers invest a large sum of money in state funding and federal aid every year for students to acquire a college education and be knowledgeable (Bipartisan Policy Center, 2013). Even though the investment exists, students who borrow loans to assist them in college graduate with an average of thirty million dollars in debt. This has become a concern to the group. Moreover, the debt that students have, have led to lifetime loss of wealth and drags on our state economy since some borrowers may take a lot of time to buy a home and even starting their own families.
Name a group that would oppose this policy.
Navient, the country’s largest servicer of both private and federal student loans, would fight the student loan system as they were recently sued by the CFPB. The group illegally and systematically failed borrowers at all stages of repayment. For many years, the organization has developed challenges to compensation by supplying wrong information, failing to process payments well, and failing to take actions when borrowers made complaints. Through deception and shortcuts, the group also illegally cheated many struggling borrowers out of their rights to decreased repayments, which made them pay more than they had to for their borrowed loans. The group has not supported this policy for the group has failed consumers for many years who counted on the organization to assist them in giving them a fair opportunity to repay their student loans.
How is the Consumer Financial Protection Bureau financed?
The CFPB is not self-funded. The organization receives funding from the Federal Reserve Board. It is within the system of the Federal Reserve. The Federal Reserve is seen as an independent bank that is central since its decisions concerning monetary policy do not have to be allowed by the president or any other individual in the legislative or executive branches of government. It does not get funding approved by the Congress. It functions around the authority of Congress, but the taxpayer or Congress does not fund it. The operations of the CFPB are financed by transfers made by the board of governors of the federal system from the integrated earnings of the system up to the limits indicated in the Dodd-Frank Act. The funding is adequate because it receives funding from an independent source every year and the federal system protects CFPB from unnecessary influence from politics.
Describe the population most affected by your chosen policy.
Students are mostly affected by student loans policy. Many students in the country depend on the availability of student loans to finish their education because of the hard economic times. It has become necessary for students apply for loans to further their goals in education. Since 2009, many borrowers with student loans from the federal government have had a right under the law to set their monthly payments for student loans according to their family size and income. For students with insufficient finances, such differences can make a real change in the lives of the students. It has now become easy for student s to apply for loans as the repayment plan is favorable.
Name one possible positive outcome for your policy selection
The new policies on student loans have improved the process of application for federal student assistance, increased repayment that is driven by income and assisted borrowers in navigating the process of reimbursement as well as reducing the rates of students’ loan interests. For instance, the organization has expanded and enhanced the repayment options for income-driven loans, making sure that by the end of 2015, all loan borrowers have the ability to reduce their payments by ten percent of their annual income for the purpose of making the payments on loans manageable (Bipartisan Policy Center, 2013). The organization has also increased the awareness of borrowers by coming up with email campaigns as well as targeted outreach accomplishment.
Name one gap in your policy selection. Support your answer.
The lack of reliable on the market of student debt may affect how officials understand the impact of student debt on the growth of the economy. The large amounts of unpaid student loans may put at stake the economy of the state in the subsequent years. Many household finances are directed towards paying student loans rather than purchasing new products and services, investing in businesses or retirement savings. Authorities lack the understanding of how student debt impact decisions concerning finances and how problems in the future concerning repaying student loans may affect other sectors of the economy.
Should social workers support this policy?
Social workers should endorse this policy because the policy gives students the opportunity to apply student loans to aid them in their education. The system allows for faster processing of student loans, and it discourages the failure of granting student loans based on irrelevant grounds. Also, interest rates have highly reduced which will enable students to spend less on repaying their loans. There is also increased awareness of the eligibility of student loans and the repayment process hence students cannot be easily cheated during the borrowing and the repayment process.
References
Bipartisan Policy Center. (2013). The consumer financial protection bureau: Measuring the progress of a new agency. publications.nclr.org , 15-24.
