On September 13, the CFPB published a
blog post stating that higher student loan interest rates could cost students over $3 billion in the aggregate in additional interest for loans taken out in 2024. The Bureau reported that on July 1, interest rates for new federal student loans rose to the highest level since 2006, with undergraduate loan rates increasing to 6.53 percent — almost a 19 percent increase compared to last year. and a 44 percent increase from five years ago. The CFPB emphasized that, given the current interest rate environment, borrowers are often forced to choose between a private loan with lower rates that do not provide the important protections that come with federal student loans, or federal student loans with higher rates. The CFPB highlighted it has observed instances in which private student loan servicers denied benefits improperly, failed to honor protections afforded to borrowers by law, and referenced borrower complaints that private student lenders acted improperly. The Bureau warned it will continue to “ensure that student loan companies comply with federal consumer protection laws.”
