Better Future Forward enters into Consent Order with the Consumer Financial Protection Bureau related to disclosure of its Income Share Agreements

Under the Order, BFF will work with the Bureau to develop a CFPB-approved disclosure regime for its ISAs under existing federal disclosure laws

For Immediate Release

September 7, 2021

Alexandria, VA, USA

Contact Name:

Kevin James

Phone: 703-587-4080
kevin.james@betterfutureforward.org www.betterfutureforward.org

On August 27, Better Future Forward (BFF) entered into a Consent Order with the Consumer Financial Protection Bureau (CFPB) related to the federal disclosures provided as part of its income share agreements (ISAs).

ISAs provide funding for postsecondary education for which the payment amounts are tied to the student’s income.

In response to the Consent Order, Kevin James, CEO of BFF, makes the following statement:

“Given the promise of ISAs and their uncertain treatment within existing regulatory regimes, BFF has been a leader in advocating for policymakers to adopt clear and protective guardrails for the emerging ISA space. In this vein, we appreciate the Bureau’s recognition of our demonstrated good faith and cooperation throughout this process, as reflected in the Consent Order. While there has been uncertainty about the application of the existing federal loan disclosure regime to risk-sharing tools like ISAs, we believe CFPB’s oversight role is critical and are eager to work with the Bureau to bring clarity to these questions around how federal disclosures should apply to BFF’s ISAs.”

BFF is a 501(c)(3) nonprofit that develops sustainable community-based funds designed to ensure all students have equitable, affordable access to postsecondary education. Since fall 2017, BFF has provided over 170 students with sustainable education financing to complete postsecondary education. To date, almost 90% of BFF’s students have persisted in, or graduated from, their four-year college degree program.

Under BFF’s programs, students can use money from a community fund to cover aid gaps they face in pursuing their education. Students then agree to make 120 income-determined payments back to the fund in months where they are earning above $40,000 (adjusted each year for inflation).A student’s payment—if any is due—is calculated based on a fixed percentage of the student’s income. A student’s obligation is complete after making 120 income-determined payments, after 240 months elapses, or they reach an early completion amount – whichever occurs first.