At the same time, Chopra did not seem to be a fan of quantitative easing, where the fed buys up US Treasury notes and mortgaged-backed securities, as anything that aids people with student loans. Other consumer loans remain at historic lows, even as the market seems to be entering a climate of rising interest rates. By contrast, rates on student loans have mainly fixed rates of 8% and up and are applied to a much bigger principle than most credit card or auto loans. An estimated 7 million student loan borrowers are in default.
A practical reason that keeps 20- and 30-somethings from buying property is that they simply don't have the cash for a down payment, especially if a lot of their income is going to pay off a student loan. If your credit score is borderline or even fair, the risk of being turned down for a mortgage is that your score could plummet even if you can put 20% downa lose/lose situation.
The CFPB has said that it is looking to provide solutions for these issues in the future as it plays an increased role in regulating student loans. Chopra suggested that investors and loan servicers cut borrowers some slack on refinancing options.
Jacob Gaffney, executive editor of HousingWire, noted that one conference participant took exception to Chopra's remarks on the state of the industry. "Chopra earlier suggested investors and servicers allow a higher degree of refinancing in the space, considering the high levels of default and the psychological barrier to borrowing," wrote Gaffney in an October 8 blog post. He noted that a conferee told Chopra "in no uncertain terms that if he wants change he should go to Congress instead of blaming student loan financiers."