For Immediate Release
Consumer Financial Protection Bureau Fines Predatory Student Lending Practices
Churches and Synagogues Pray for Students Trapped in Debt
WASHINGTON - Synagogues and churches held prayer services for students as the Consumer Financial Protection Bureau fined Discover Bank $18.5 million for illegal student lending practices. The bank must repay students $16 million, pay a $2.5 million civil penalty and reform its lending practices. The Bureau accused Discover of overstating the minimum amount due in billing statements, misrepresenting students' total interest payments and engaging in illegal debt collection practices. The penalty is the first of its kind by the Bureau against a student loan company.
"This fine sends a strong message to companies that take advantage of students," said Eric LeCompte, executive director of the religious anti-poverty coalition Jubilee USA Network, which advocates for responsible student lending policies. "Predatory lending traps students in debt."
This past weekend, 64 faith communities from 26 states prayed and acted for fair student lending policies as part of Jubilee USA's national interfaith "Jubilee for Students" prayer event. In 2012 and 2013, the event pushed congressional legislation to stop federal student loan interest rate increases.
"Unfair lending practices put our young people at risk," said Rabbi Barnett Brickner of Temple Israel in Alameda, Calif. "It's important we protect our students and ensure they can graduate college without mountains of debt."
As a part of religious services, communities collected students' stories as part of a national campaign to highlight predatory lending practices.
"Our community is deeply concerned about the debt burdens our young people face," said Michelle Knight of Our Lady Queen of Peace Catholic Church in Arlington, Va. "Predatory lending practices are a big reason for those burdens."
According to the Federal Reserve, total outstanding US student debt is $1.3 trillion. The Wall Street Journal reports that the average four-year college student graduated this year with $35,000 in student debt and that college tuition increased 500% from 1985 to 2015.
"High student debt burdens harm young people and create strong ripples across our economy," LeCompte said. "Ultimately, these debt burdens impact all of us."
Read more about Jubilee for Students Weekend.
Read more about the Consumer Financial Protection Bureau's action against Discover Bank.