The bureau recommends requiring colleges to become more involved when students take out private loans. The report also urges regulators to look into providing additional protections to private loan borrowers that mimic some features of federal loans, such as forbearance, deferment or income-based repayments. And while stopping short of calling on Congress to once again allow borrowers to discharge private student loans in bankruptcy -- which was outlawed in 2005 -- the report’s authors indicated they found few reasons not to do so. But the agency also found that some of what it considered the worst practices of the private lending industry have ceased. Between 2005 and 2008, private student lending boomed, increasing from about $7 billion to over $20 billion in 2008. At its peak, private lenders made loans to students with low credit scores and no co-signers, often allowing borrowers to take out loans that far exceeded the cost of attendance at their colleges.
http://www.insidehighered.com/news/2012/07/20/consumer-financial-protection-bureau-issues-report-private-student-lending
