The Consumer Financial Protection Bureau said it will take steps to help students with a $2,000 consolidation loan that had been delayed due to the Great Recession.
The bureau announced Monday that it will provide an emergency loan program to students who have been delayed by a loan consolidation program and need a loan to cover unexpected costs.
“The bureau is making the decision to extend this emergency loan to help those who have not been able to complete their consolidation loan and who are facing significant financial hardship due to a loan restructuring,” the bureau said in a statement.
“We appreciate the outpouring of support from students and families as they seek solutions to their student loan debt.”
Under the bureau’s emergency loan, students with outstanding student loans can apply to the bureau and get an automatic payment of $1,000, which they can use to pay off their loan or refinance their existing loan.
They can also apply for another loan consolidation.
If they are approved, they will get a refund from the government and have their student loans reduced in full or forgiven.
The federal government also will provide grants to help with consolidation loans and other financial aid to students with student loans that have been suspended or have been repossessed.
A federal loan consolidation fee of $2.25 per month has been in effect since 2009, and students who need a consolidation loan should pay this fee to the government.
The bureau also said it is reviewing the fee to see if it should be increased.
Students with loans that are in default and would be affected by the change in the fees could apply to either the bureau or the government for help paying down their student debt.
If you are considering a student loan restructuring, contact a loan servicers or a student aid office.