Hassan seeks review into misleading student loan claims
CONCORD, N.H. (AP) — U.S. Sen. Maggie Hassan is calling for an investigation into whether some student loan providers mislead millions of borrowers about their rights if they declare bankruptcy.
The New Hampshire Democrat said Saturday that she’s signed onto a letter with her Senate colleagues seeking a review by the Consumer Financial Protection Bureau.
She cited a recent report from the non-profit Student Borrower Protection Center that found that some lenders offering “non-qualified” loans have misstated the details about how different loans can be discharged through bankruptcy. While qualified student loans can only be discharged due to undue hardship, non-qualified private loans do not carry that requirement.
More than 2 million borrowers with non-qualified loans may not have understood their rights under bankruptcy, according to the senator’s letter.
“Private student loan lenders took advantage of the widespread belief that all private student loans are non-dischargeable in bankruptcy and that lenders marketed their non-qualified education loans under this false pretense,” the Senators wrote in their letter.
The letter urges the CFPB to review the center’s findings and take appropriate action against lenders who aren’t being transparent with borrowers.