Top regulator says action on student debt necessary to avert crisis

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Regulators must help curb mounting student debt to reduce the risk of another financial crisis, Rohit Chopra, the Consumer Financial Protection Bureau’s top official, recently said, American Banker reports.

The student debt situation resembles the housing market as it neared collapse on the eve of the financial crisis, American Banker noted. Among other parallels, the publication said, student debt has grown rapidly on the back of liberally administered government guarantees.

Given that wages have declined for graduates, students saddled with outsized loans will be less equipped to obtain mortgages to buy homes, a potential strain on the housing market, Chopra reportedly said.

Source: American Banker