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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

AAMC Urges CFPB to Recommend TILA Changes

January 20, 2012—The AAMC sent a Jan. 17 comment letter  to the Consumer Financial Protection Bureau (CFPB) urging the bureau to recommend that Congress exclude all federal loans, including the Title VII and VIII health professions loans, from the definition of “private education loan” under the Truth in Lending Act (TILA).

The letter comes in response to the CFPB’s “Request for Information Regarding Private Education Loans and Private Educational Lenders” published in the Nov. 17, 2011, Federal Register.

The TILA definition of private education loan encompasses federal loans administered by the Health Resources and Services administration (HRSA) and authorized under Title VII of the Public Health Service Act, despite exempting similar loans administered by the Department of Education and authorized under Title IV of the Higher Education Act.

The AAMC letter notes that Title VII loans currently have better interest rates and terms than the federal Direct Stafford and GradPLUS loan programs offered under Title IV, yet TILA favors Title IV loans and requires additional paperwork for both the students seeking Title VII loans and the advising financial aid offices. The letter continues, “despite good intentions, this conflicting guidance can falsely discredit financial aid administrators, confuse students, and can result in borrowing that is not in the best interest of the student.”

The CFPB will use comments it receives to prepare a “Report on Private Education Loans and Private Education Lenders.”

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116
Email: mshick@aamc.org

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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org