Federal Register / Vol. 78, No. 39 / Wednesday, February 27, 2013 / Notices 13327 

1Consumer Financial Protection Bureau and 

Department of Education: Report on Private Student 

Loans (2012). 

SUMMARY: The New England Fishery 

Management Council (Council) is 

scheduling a public meeting of its 

Habitat Committee to consider actions 

affecting New England fisheries in the 

exclusive economic zone (EEZ). 

Recommendations from this group will 

be brought to the full Council for formal 

consideration and action, if appropriate. 

DATES: This meeting will be held on 

Tuesday, March 19, 2013 at 9 a.m. 

ADDRESSES: The meeting will be held at 

the Hawthorne Hotel, 18 Washington 

Square, Salem, MA 01970; telephone: 

(978) 744–4080; fax: (978) 745–9842. 

Council address: New England 

Fishery Management Council, 50 Water 

Street, Mill 2, Newburyport, MA 01950. 

FOR FURTHER INFORMATION CONTACT: Paul 

J. Howard, Executive Director, New 

England Fishery Management Council; 

telephone: (978) 465–0492. 

SUPPLEMENTARY INFORMATION: The 

Habitat Committee will continue 

development of management 

alternatives for Omnibus EFH 

Amendment 2. Regarding Dedicated 

Habitat Research Areas, the Committee 

will review PDT recommendations 

about: (1) Implementing dedicated 

habitat research areas (e.g. defining 

‘‘use’’ in relation to sunset provisions), 

(2) goals and objectives for specific 

research areas, and (3) boundaries for 

Eastern Maine and Georges Bank 

DHRAs. Regarding gear modifications, 

the Committee will (1) review PDT 

information about gear modifications for 

scallop dredges, (2) discuss other gear 

modification options as needed, and (3) 

discuss a gear modification research 

agenda and data collection program. 

The Committee will also review 

recommended boundaries for a single 

Habitat Management Area in the Great 

South Channel. Other business may be 

discussed as necessary. 

Although non-emergency issues not 

contained in this agenda may come 

before this group for discussion, those 

issues may not be the subject of formal 

action during this meeting. Action will 

be restricted to those issues specifically 

listed in this notice and any issues 

arising after publication of this notice 

that require emergency action under 

section 305(c) of the Magnuson-Stevens 

Act, provided the public has been 

notified of the Council’s intent to take 

final action to address the emergency. 

Special Accommodations 

This meeting is physically accessible 

to people with disabilities. Requests for 

sign language interpretation or other 

auxiliary aids should be directed to Paul 

J. Howard, Executive Director, at (978) 

465–0492, at least 5 days prior to the 

meeting date. 

Authority: 16 U.S.C. 1801 et seq. 

Dated: February 22, 2013. 

Tracey L. Thompson, 

Acting Deputy Director, Office of Sustainable 

Fisheries, National Marine Fisheries Service. 

[FR Doc. 2013–04509 Filed 2–26–13; 8:45 am] 

BILLING CODE 3510–22–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

[Docket No. CFPB–2013–0004] 

Request for Information Regarding an 

Initiative To Promote Student Loan 

Affordability 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Notice and request for 

information. 

SUMMARY: This notice requests 

information from the public to 

determine options that would increase 

the availability of affordable payment 

plans for borrowers with existing 

private student loans. Section 1035 of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act) establishes an ombudsman for 

student loans (Ombudsman) within the 

Consumer Financial Protection Bureau 

(Bureau). Among other things, the 

Ombudsman is responsible for making 

‘‘appropriate recommendations’’ to the 

Director of the Bureau, the Secretary of 

the Treasury, the Secretary of 

Education, and Congress. 

In October 2012, the Ombudsman 

presented a report, which recommended 

that policymakers identify opportunities 

to spur refinance and modification 

activity in the private student loan 

market. This notice seeks information 

from market participants, consumers, 

and other stakeholders in order to 

provide more detailed information on 

ways to encourage the development of 

more affordable loan repayment 

mechanisms for private student loan 

borrowers. 

DATES: Comments must be received on 

or before April 8, 2013. 

ADDRESSES: You may submit responsive 

information and other comments, 

identified by Docket No. CFPB–2013– 

0004, by any of the following methods: 

• Electronic: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail/Hand Delivery/Courier: 

Monica Jackson, Office of the Executive 

Secretary, Consumer Financial 

Protection Bureau, 1700 G Street NW., 

Washington, DC 20552. 

Instructions: The Bureau encourages 

the early submission of comments. All 

submissions must include the document 

title and docket number. Because paper 

mail in the Washington, DC area and at 

the Bureau is subject to delay, 

commenters are encouraged to submit 

comments electronically. Please note 

the number associated with any 

question to which you are responding at 

the top of each response (you are not 

required to answer all questions to 

receive consideration of your 

comments). In general, all comments 

received will be posted without change 

to http://www.regulations.gov. In 

addition, comments will be available for 

public inspection and copying at 1700 

G Street NW., Washington, DC 20552, 

on official business days between the 

hours of 10 a.m. and 5 p.m. Eastern 

Time. You can make an appointment to 

inspect the documents by telephoning 

202–435–7275. 

All submissions, including 

attachments and other supporting 

materials, will become part of the public 

record and subject to public disclosure. 

Sensitive personal information, such as 

account numbers or Social Security 

numbers, should not be included. 

Submissions will not be edited to 

remove any identifying or contact 

information. 

FOR FURTHER INFORMATION CONTACT: For 

general inquiries, submission process 

questions or any additional information, 

please contact Monica Jackson, Office of 

the Executive Secretary, at 202–435– 

7275. 

Authority: 12 U.S.C. 5511(c). 

SUPPLEMENTARY INFORMATION: There are 

more than 38 million student loan 

borrowers with over $1.1 trillion in 

outstanding debt. The majority of the 

market consists of loans originated 

under Title IV of the Higher Education 

Act. The remainder of the market 

consists of private student loans. In July 

2012, the Director of the Bureau and the 

Secretary of Education submitted a 

report to Congress detailing the private 

student loan market. The report 1 found 

that, as of the end of 2011, there were 

more than $8 billion in defaulted 

private student loan balances, with even 

more in delinquency. Federal student 

loans frequently provide for incomebased repayment options for borrowers 

with partial financial hardship, as well 

as rehabilitation options for borrowers 

in default. In general, private student 


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13328 Federal Register / Vol. 78, No. 39 / Wednesday, February 27, 2013 / Notices 

2Consumer Financial Protection Bureau: Annual 

Report of the CFPB Student Loan Ombudsman 

(2012). 

3See, for example, CNBE Policy Guidance 2010– 

02, issued by the Office of the Comptroller of the 

Currency in August 2010. 

4 Department of the Treasury, Office of Financial 

Research: Annual Report to Congress (2012). 

loans do not offer similar modified 

repayment options. 

The Dodd-Frank Act requires the 

Secretary of the Treasury to designate an 

Ombudsman within the Bureau. The 

Dodd-Frank Act requires that the 

Ombudsman present an annual report 

describing the activities of the 

Ombudsman during the prior year, 

compile and analyze data on borrower 

complaints regarding private 

educational loans, and make 

appropriate recommendations to 

policymakers. In October 2012, the 

Ombudsman released an annual report.2

The report, among other things, 

analyzed complaints and other input 

from private student loan borrowers, 

and noted that many consumers 

reported difficulties negotiating 

repayment plans with their lenders and 

servicers in times of financial difficulty, 

as well as challenges finding refinance 

options. Included in the report was a 

recommendation that policymakers 

identify options to spur the availability 

of loan modification and refinance 

options for student loan borrowers. 

Some policymakers have sought 

changes to the treatment of private 

student loans in the bankruptcy code. 

This policy option is not the primary 

subject of this Request for Information. 

Rather, this request seeks information 

on options to increase the level of 

affordable repayment options for both 

pre-default and post-default borrowers 

in distress who wish to repay their loans 

but may be lacking near-term ability to 

service their obligations. 

Loan Modifications 

For the purposes of this request, a 

loan modification refers to a 

restructuring of a debt obligation agreed 

to by the creditor and debtor where the 

creditor agrees to a concession. In recent 

years, many homeowners have sought 

more affordable repayment options for 

mortgage obligations to avoid 

foreclosure. In such situations, some 

creditors may have an economic 

incentive to modify the loan, as the net 

present value (NPV) of the restructured 

debt may be greater in value than the 

value of the collateral after foreclosure 

costs. However, in other situations, with 

respect to securitized debt obligations 

secured by residential real estate, 

subordinated note holders might be 

unwilling to approve a change in terms. 

Given the potential impact foreclosures 

can have on the financial system and 

local economies, many policymakers 

pursued policies designed to encourage 

alternative repayment options for 

mortgage borrowers. 

The private student loan market might 

also benefit from further loan 

modification activity. Even with 

concessions, creditors might increase 

the NPV of distressed loans through 

such modifications. However, the 

market for private student loans differs 

from the market for residential 

mortgages. Private student loans are not 

secured by collateral and have generally 

lower outstanding balances relative to 

mortgages. These differences might 

fundamentally impact creditors’ 

economic calculus for determining 

whether to offer a change in repayment 

terms. 

There are also some important 

similarities between the two markets. As 

with mortgage origination, student loan 

originators often access funding through 

the asset-backed securities (ABS) 

market. In 2012, public filings reveal 

that more than $4 billion of private 

student loan asset-backed securities 

were issued. Like in the mortgage 

market, private student loan 

underwriting practices have 

significantly improved since the 

economic downturn, which may limit 

the level of distress for future borrowers. 

Another notable similarity is the 

employment of third-party loan 

servicers unaffiliated with the original 

lender, though this practice is less 

prevalent in the private student loan 

market than in the mortgage market. 

Borrowers of federal student loans 

have a number of options to modify the 

terms of their obligations to ensure an 

affordable payment plan. For example, 

borrowers with a partial financial 

hardship can elect the Income-Based 

Repayment plan, which caps payments 

on eligible student loans as a percentage 

of income above 150% of the poverty 

line. Borrowers in default can 

rehabilitate many federal student loans 

by making ‘‘reasonable and affordable’’ 

payments in a consistent, timely fashion 

for a specified period. There are also 

provisions to adjust the status of a 

rehabilitated federal student loan on a 

consumer’s credit report. 

Available data indicate that, in recent 

years, there has been limited 

modification activity in the private 

student loan market. There are a number 

of potential impediments to offering 

alternative repayment options. Some of 

these may include: (a) Accounting 

guidelines that add complexity when 

offering alternative repayment options 

without charging off the loan; 3 (b) 

operational and information technology 

limitations among loan servicers; and (c) 

incentive mismatch among trustees, 

administrators, and/or noteholders in 

ABS trusts and loan servicers. 

Impacts on Individual Borrowers and 

the Public 

Policymakers have employed various 

measures to prevent foreclosures among 

American homeowners and to mitigate 

resulting risks to the public and the 

broader economy. Examples of these 

risks include increased stress on insured 

depository institutions and decreased 

home values of properties proximate to 

foreclosed homes—both of which can 

lead to further distress. Given the 

relative size of the private student loan 

market and the nature of the product, 

private student borrower distress is 

unlikely to contribute to similar, 

significant systemic risk. However, 

distress among borrowers with all types 

of student loans may cause other 

negative effects in the broader economy. 

For example, the Department of 

Treasury’s Office of Financial Research 

described in its recent annual report 

that student loan debt might dampen 

consumption.4 Changes in the 

household headship rates, automobile 

sales, and homeownership by younger 

Americans might also be impacted by 

student debt levels. Should these risks 

be significant, policymakers may wish 

to consider partnerships between the 

federal government and the private 

sector to increase the availability of 

alternative repayment options and 

reduce the levels of delinquency and 

default. 

The Ombudsman seeks information in 

order to provide policymakers with 

further details on potential ways to 

increase payment affordability for 

private student loan borrowers in 

distress and on the risks of failing to do 

so. The deadline for submission of 

comments is April 8, 2013. 

The Bureau encourages comments 

from the public, including: 

• Consumers; 

• Financial institutions, including 

lenders and loan servicers; 

• Nationally recognized statistical 

rating organizations (NRSROs); 

• Private student loan asset-backed 

trust administrators; 

• Institutions of higher education; 

• Credit reporting agencies; 

• Debt collectors; 

• Housing finance professionals; 

• Manufacturers of automobiles and 

other financed goods; 

• Brokers and service providers in the 

residential real estate industry; 


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Federal Register / Vol. 78, No. 39 / Wednesday, February 27, 2013 / Notices 13329 

• Professional associations, such as 

those representing health professionals 

and teachers; 

• Providers of financial counseling; 

and 

• Other interested parties. 

The Bureau is interested in responses 

in the following general areas, as well as 

specific questions below. Please feel free 

to respond to any of the questions 

outlined below. 

Scope of Borrower Hardship 

1 What are the primary drivers of 

private student loan borrower distress? 

a What characteristics might predict 

distress at loan origination? 

b What characteristics might predict 

distress for borrowers who complete a 

program of study? 

c What characteristics might predict 

distress during repayment? 

d What are typical debt-to-income 

ratios of borrowers in distress? 

2 How do borrowers in distress 

typically stay current with their private 

student loans? To what extent do 

borrowers reduce consumption or adjust 

living arrangements to meet obligations? 

a Do borrowers seek to reduce 

payments on federal student loans in 

order to make payments on private 

student loans? 

b To what extent do borrowers in 

distress accrue other debt (credit cards, 

family loans) to meet private student 

loan obligations? 

c To what extent do borrowers in 

distress forego ‘‘other nonessential 

expenses’’ to meet private student loan 

obligations? 

Current Options for Borrowers with 

Hardship 

3 What options currently exist for 

borrowers to permanently or 

temporarily lower monthly payments on 

private student loan obligations? To 

what extent have these affordable 

repayment options cured delinquencies? 

4 How do lenders typically evaluate 

whether or not a borrower qualifies for 

these affordable repayment options? If 

lenders make use of financial models, 

what are the key drivers of these 

models? 

5 Do lenders work directly with cosigners to modify terms? If so, how? 

6 What is the incidence or 

expectation of re-default rates among 

restructured private student loans? 

Past and Existing Loan Modification 

Programs for Other Types of Debt 

7 What are some examples of loan 

modification programs sponsored by a 

public entity or the private sector that 

have been successful? Which features of 

these programs might be applicable to a 

student loan affordability program? 

Which features of these programs might 

not be appropriate for a student loan 

affordability program? 

Servicing Infrastructure 

8 Is the servicing infrastructure 

utilized by major lenders flexible 

enough to process loan modifications at 

scale? What are the limitations of these 

servicing platforms? Are those 

limitations capable of being overcome? 

What are the estimated costs of 

overcoming those limitations? 

9 What are the key differences 

between servicing of student loans 

compared to servicing of residential 

mortgages that must be considered 

when crafting an affordability program? 

Consumer Reporting and Credit Scoring 

10 How are payments plans for 

defaulted private and federal student 

loans currently reported to consumer 

reporting agencies? How are 

rehabilitated federal student loans 

reported by consumer reporting 

agencies, and how does that reporting 

affect credit scores? 

Lender Participation 

11 How might an affordability 

program sponsored by a public entity 

mitigate moral hazard and selection 

bias? 

Borrower Awareness 

12 What are some examples of 

modification or refinance initiatives that 

successfully made borrowers aware of a 

new program? Which features of these 

programs are applicable in the private 

student loan market? 

13 What are the most effective 

communication mechanisms to reach 

borrowers in distress? 

Spillovers 

14 How do student loan payments 

impact access to mortgage credit? How 

does student debt impact a consumer’s 

ability to accumulate a down payment? 

How does student debt impact a 

consumer’s ability to meet debt-toincome requirements for FHA-insured 

and private sector mortgages? 

15 To what extent does student loan 

debt impact the market for automobiles? 

How does student loan debt impact a 

consumer’s ability to secure an auto 

loan? 

16 What evidence exists about the 

impact of student loan debt on 

consumption, savings, homeownership, 

household formation, entrepreneurship, 

and other indicators of economic 

health? 

Dated: February 20, 2013. 

Garry Reeder, 

Chief of Staff, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–04419 Filed 2–26–13; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF DEFENSE 

Department of the Air Force 

U.S. Air Force Academy Board of 

Visitors Notice of Meeting 

AGENCY: U.S. Air Force Academy Board 

of Visitors. 

ACTION: Meeting notice. 

SUMMARY: In accordance with 10 U.S.C. 

9355, the U.S. Air Force Academy 

(USAFA) Board of Visitors (BoV) will 

hold a meeting in Harmon Hall at the 

United States Air Force Academy in 

Colorado Springs, Colorado on March 

15–16, 2013. The meeting will begin at 

2:30 p.m. on March 15 and 9:00 a.m. on 

March 16. The purpose of this meeting 

is to review morale and discipline, 

social climate, curriculum, instruction, 

infrastructure, fiscal affairs, academic 

methods, and other matters relating to 

the Academy. Specific topics for this 

meeting include a Forthclassmen Cadet 

Focus Group, an Upperclassmen Cadet 

Focus Group, an Athletic Department 

Update, a Superintendent’s Update, a 

Character Update, an Impact of NDAA 

Requirements brief and the 

Subcommittee Chair Updates. In 

accordance with 5 U.S.C. 552b, as 

amended, and 41 CFR 102–3.155, three 

sessions of this meeting shall be closed 

to the public because they involve 

matters covered by subsection (c)(6) of 

5 U.S.C. 552b. Public attendance at the 

open portions of this USAFA BoV 

meeting shall be accommodated on a 

first-come, first-served basis up to the 

reasonable and safe capacity of the 

meeting room. In addition, any member 

of the public wishing to provide input 

to the USAFA BoV should submit a 

written statement in accordance with 41 

CFR 102–3.140(c) and section 10(a)(3) of 

the Federal Advisory Committee Act 

and the procedures described in this 

paragraph. Written statements must 

address the following details: The issue, 

discussion, and a recommended course 

of action. Supporting documentation 

may also be included as needed to 

establish the appropriate historical 

context and provide any necessary 

background information. Written 

statements can be submitted to the 

Designated Federal Officer (DFO) at the 

Air Force address detailed below at any 

time. However, if a written statement is 


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