CFPB Issues Report on Tuition Payment Plans – Calls Plans Risky, Confusing and Expensive

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January 17, 2024 · by COHEAO · Spark Notes

September 14 – Today, the Consumer Financial Protection Bureau (CFPB) issued a report focused on institutional tuition payment plans that assist students in affording their postsecondary education. The report looked at 450 institutions that offer plans, evaluating these plans based on website information. They found that some programs tack on onerous fees and other costs, while also interest-free.

Specifically, the report highlights the following risks that borrowers may face:

  • Coercive debt collection practices
  • Snowballing fees and interest
  • Borrowers forced to sign away their legal rights
  • Confusing and inconsistent disclosures.

The CFPB indicates they will continue to review, gather further information and analyze these plans in order to determine whether these practices rise to violation of federal law. COHEAO will work with the CFPB in helping to better understand these programs and ensure that the Bureau is acting on accurate data and information.

You can view the CFPB press release here and the report here.