CFPB to Examine Colleges’ Direct Lending Practices

On January 20, 2022, the CFPB announced that it will examine post-secondary, for-profit colleges, that lend directly to students.  The CFPB will examine specific actions that these colleges take against their students who are late or delinquent on private student loans.  These practices include: placing enrollment restrictions on students, withholding transcripts from students, improperly accelerating payments, failing to issue refunds, and maintaining improper lending restrictions.  The CFPB said that its concern was generated by past practices at schools where students faced high interest rates and improper debt collection practices.  The CFPB examiners will use the Education Loan Examination Procedures manual, which the CFPB will incorporate into the CFPB’s general Supervision and Examination Manual.