CFPB Warns Private Lenders Mislead Borrowers On Refinancing Risks, Costing Access To Loan Forgiveness Programs

Benzinga 2024-12-18

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The Consumer Financial Protection Bureau warned that private lenders use deceptive practices to mislead federal student loan borrowers about refinancing, potentially costing them access to loan forgiveness programs. Refinancing converts federal loans into private debt, eliminating eligibility for relief options like Public Service Loan Forgiveness and income-driven repayment plans. The CFPB report highlights that borrowers may lose forgiveness opportunities, while private lenders profit from full loan repayments.

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