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CFPB tweets ‘negligent’ advice to student-loan borrowers

Source: Jillian Berman, MarketWatch

The Consumer Financial Protection Bureau posted a tweet last week highlighting forbearance, an option borrowers struggling to repay their student loans can use to pause their payments. “If you’re having a hard time paying your student loans, you may qualify for loan forbearance,” the tweet read.

Experts generally advise borrowers consider forbearance only as a short-term last resort. When borrowers use forbearance, their payments pause, but interest continues to accrue on their debt and capitalizes—the unpaid interest on a debt is added to its principal—once the borrower exits forbearance. As a result, borrowers often see their debts balloon. What’s more, borrowers in forbearance are not earning credit towards having their debt discharged under Public Service Loan Forgiveness or other programs.

Read Full Article: CFPB tweets ‘negligent’ advice to student-loan borrowers

 
 
 

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