3170-XXXX Student Loan Supporting Statement A

Student Loan Borrower Survey Program

(OMB Control Number: 3170-XXXX

OMB Expiration Date: XX/XX/XXXX

Supporting Statement For

Student Loan Borrower Survey Program

(OMB CONTROL NUMBER: 3170-XXXX)

A. Justification

1.Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

One of the primary functions of the Consumer Financial Protection Bureau (CFPB) as set forth in section 1021(c) of the Dodd-Frank Act is “collecting, researching, monitoring and publishing information relevant to the functioning of markets for consumer financial products and services.” Effectively performing that function is integral to assuring that the CFPB achieves the purposes and objectives set forth in sections 1021(a) and 1021(b) of the Act.

To that end, section 1013(b)(1) of the Dodd-Frank Act required the creation of a research unit whose “functions shall include researching, analyzing and reporting on” a number of topics including “consumer awareness, understanding, and use of disclosures and communications regarding consumer financial products or services;” “consumer awareness and understanding of costs, risks, and benefits of consumer financial products or services;” and “consumer behavior with respect to consumer financial products or services.”

Additionally, section 1013(d)(1) established the Office of Financial Education within the CFPB, which is responsible for “developing and implementing initiatives intended to educate and empower consumers to make better informed financial decisions.” Section 1013(d)(3)(B) requires the Office of Financial Education to work with the Office of Research to “conduct research related to consumer financial education and counseling.”

The CFPB seeks approval to collect data under a new survey program known as the “Student Loan Borrower” survey. The Student Loan Borrower survey uses the Consumer Credit Information Panel (CCIP), a proprietary random sample of de-identified credit records from one of the three major nationwide consumer reporting agencies, as a frame to survey people about their experiences in consumer credit markets. This survey will also solicit information on the sampled consumers’ experience related to use of credit products contained

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

Some of the CFPB’s key focuses are monitoring consumer financial markets and rigorously studying and reporting on consumer decisions and outcomes. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) authorizes the CFPB to engage in research and market monitoring activities to assess trends and to identify emerging risks in consumer financial markets. Section 1013(b)(1) of the Dodd-Frank Act establishes the Office of Research for the purpose of researching, analyzing, and reporting on topics related to the CFPB’s mission, including consumer behavior, consumer awareness, and developments in markets for consumer financial products and services. The Office of Research grounds its understanding in these areas in rigorous empirical analyses that can, in turn, be used to benefit consumers, businesses, and researchers, among others.

Surveys that are directly linked to the CCIP are invaluable to this research agenda because the CCIP provides extensive longitudinal data on households’ liabilities and their credit score—a key measure of creditworthiness as perceived by lenders. Surveys connected to the CCIP can provide information that are not available in credit records such as perceptions, behaviors, experiences, income, expenditures, economic shocks, and ownership and values of various assets (homes, savings accounts, etc.).

This research will improve the CFPB’s understanding of consumer financial markets, particularly for student loans. In addition, research may be related to the CFPB’s mission regarding financial education, including financial planning behaviors such as saving, spending, and investing.

The main research questions for this information collection relate to consumers’ use of and experience with student loans. Little is known, for example, about how various student loan discharge and forgiveness programs have affected borrowers’ use of other credit or how borrowers’ experiences with servicers affect their use of income-driven repayment plans and how that varies by their total debt burden. Likewise, there is no information from a representative sample of borrowers about how they get help from or provide help to others in repaying student loans. This information collection will also provide a first look at how borrowers are managing with the end of the federal student loan payment suspension.

The information will also serve as the basis for a CFPB report on student loan borrowers experiences and behaviors overall and during the federal student loan payment pause. The data collected will also provide information on topics of interest to researchers who study student loans, especially areas where existing data cannot answer key research questions.

Where appropriate, the Office of Research plans to disseminate the results of this research and make versions of the data and analysis available publicly. Therefore, the data to be collected under this proposed clearance will not only improve the CFPB’s understanding of the student loan market, but it will also increase the knowledge available to other policymakers and researchers. Publication of our research will increase the public transparency about the work that we are doing.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also, describe any consideration of using information technology to reduce burden.

The CFPB will employ information technology as appropriate to reduce the burden of respondents who agree to participate in its research. The survey is provided to respondents in both paper and electronic forms, and respondents are encouraged to use the electronic form if they find it most convenient.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item A.2 above.

To the best of our knowledge, the Student Loan Borrower survey program is one of the only surveys of American Consumers that uses a panel dataset of consumer credit information as a sampling frame. The information that this design provides is unique among data available on consumer finances. Other surveys that employ similar methods focus specifically on mortgage borrowing (American Survey of Mortgage Borrowers, National Survey of Mortgage Originations) or broadly survey consumers on all consumer finances (Making Ends Meet survey). The Student Loan Borrower survey, on the other hand, will provide more detailed information on both federal and private student loan borrowers’ experience with their student loans, which are the first major credit product for many consumers.

In addition, we consult with internal and external experts to determine the content of the survey and ensure that the research questions we are asking are novel, timely, and/or tailored to specific CFPB needs.

5. If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.

Data collection under this clearance is not anticipated to burden small entities significantly. Information collected under this clearance will come from individuals, not small entities. Further, participation in the survey is voluntary, and participants may opt out of them at any time. The CFPB will provide details regarding such efforts within each collection request.

6. Describe the consequence to federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

The proposed clearance will allow the CFPB to conduct a one-time survey, collecting a variety of types of data to develop a more complete understanding of consumers’ decision-making, experiences, and expectations regarding their student loans. This knowledge will improve the Office of Research’s ability to inform the CFPB in developmental and formative ways. Without this data collection, the CFPB will be hindered in its work to achieve its mission to understand consumer financial markets, consumer decisions and outcomes in these markets, and how to improve the effectiveness of information provided to consumers in consumer financial markets.¹

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

• requiring respondents to report information to the agency more often than quarterly;

• requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• requiring respondents to submit more than an original and two copies of any document;

• requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;

• in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

• requiring the use of statistical data classification that has not been reviewed and approved by OMB;

• that includes a pledge of confidentially that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

• requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentially to the extent permitted by law.

There are no special circumstances. The collection under this information collection plan is conducted in a manner consistent with the guidelines in 5 CFR 1320.5(d)(2).

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years -- even if the collection-of-information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

In accordance with 5 CFR §1320.8(d)(1), the CFPB has published a notice in Federal Register that provides the public 60 calendar days to comment on this information collection.²

Also, in accordance with 5 CFR §1320.5(a)(1)(iv), the Bureau has also published a notice in the Federal Register providing the public 30 days to comment to OMB on this information collection request.³

9. Explain any decision to provide any payments or gifts to respondents, other than remuneration of contractors or grantees.

Respondents for activities conducted under this clearance will receive a small cash incentive. This practice has proven necessary and effective in recruiting subjects to participate in this research and is also employed by the other Federal agencies. At this time, we anticipate that survey respondents will receive a $5 pre-completion incentive and a $20 post-completion incentive, along with an additional $10 if the respondent completes the survey online. We may update this protocol as appropriate to reflect more recent survey response trends as we approach the release of the survey.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

As applicable, the CFPB shall treat the information in accordance with applicable federal law, including but not limited to the CFPB’s confidentiality rules, 12 CFR Part 1070, and the federal laws and regulations that apply to federal agencies for the protection of privacy, confidentiality, security, and integrity.

When collecting information about consumer credit markets, the CFPB recognizes that there are privacy and data security risks. The CFPB uses best practices of social science research design to inform the notice and consent vehicles. The CFPB always provides notice to individuals that explain how their information will be used through appropriate vehicles, such as Privacy Notices, Privacy Act Statements or Informed Consent forms. Such notice is made available prior to the collection of information and explains whether the information is mandatory or voluntary; whether there are any opportunities to consent to sharing and submission of information; how the information will be secured, and when a System of Records is created under the Privacy Act.

When the CFPB collects information from third parties, commercial sources, and public databases, individuals to whom information may pertain do not have the opportunity to consent to uses, decline to provide information, or opt out. In such cases, it is those third parties’ responsibility to provide any opportunity that may be required to consent, decline, or opt out of how their information may be used. In such instances, the CFPB reviews the privacy policies or other public disclosures from the third-parties regarding their use of the information to verify that there are no contradictions with information sharing and the research. Additionally, the CFPB encourages the development of notice and consent opportunities.

The information collected under this clearance by contractors will include direct identifying personally identifiable information (PII) in order to contact survey participants, match the survey data to administrative records, and match school names to school characteristics. The CFPB will only receive and keep response data stripped of direct identifying PII.

Conducting this research study implicates privacy concerns because a breach of confidentiality, or re-identification, could result in an individual suffering harm. To reduce the risk of breaches of confidentiality, the CFPB designs recruitment materials so as not to disclose sensitive information about those it seeks to recruit and uses appropriate security controls to protect information used in research. There is also risk related to misuse of information collected for research. Misuse might involve secondary types of research that are incompatible with the purposes of the initial collection, or a use of the information that individuals do not understand or to which they have not provided consent.

To reduce the risk of misuse, the CFPB minimizes access to PII based on need-to-know and stipulates, in most instances, that contractors that collect data on behalf of the CFPB remove or redact all direct identifying PII, as defined by the CFPB’s privacy office, before transmitting data to the CFPB. Any contractor staff assigned to the project also sign confidentiality agreements. When appropriate, research results will be presented in aggregated form to protect the confidentiality of firms or consumers, and any publicly released version of data will use disclosure protection techniques (e.g., rounding, imputation, exclusion of some variables, aggregation of categorical responses) to minimize the risk of releasing personally identifiable or otherwise sensitive information (12 CFR 1070.40 et seq.). The CFPB treats the information collected from participating persons and institutions in a manner consistent with our confidentiality regulations, and all data and analyses are subject to legal and privacy review prior to their release.

The CFPB also evaluates the potential privacy risk and harm to individuals of specific research relative to that authorized purpose, and vets research proposals to ensure that they serve an authorized purpose. Research conducted under this clearance will be consistent with the Privacy Act and the E-Government Act. The requisite SORNs and PIAs will document the collection, use, disclosure, and retention of PII; the technical, administrative, and physical controls used to minimize privacy risks.

This research will be conducted consistent with the Privacy Act and the E- Government Act. The requisite SORNs and PIAs will document the collection, use, disclosure, and retention of PII; the technical, administrative, and physical controls used to minimize privacy risks. The SORN that will cover this collection is CFPB.022 Market and Consumer Research Records, 83 FR 23435.

When collecting information about consumer credit markets, the CFPB recognizes that there are privacy and data security risks. The CFPB outlines the way it plans to mitigate these risks when collecting data using this clearance later in this supporting statement. The Consumer Experience Research PIA covers the data that will be collected under this clearance.⁴

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

Questions about an individual’s finances, for example a person’s income or their monthly student loans costs, are commonly considered sensitive.

Nonetheless, the Office of Research must sometimes ask such questions to understand consumer behavior and recognize financial trends and emergent risks relevant to consumers. The CFPB believes that it is justified in asking these types of sensitive questions because they are central to its mission.

In addition, some people may believe that questions about race or other socioeconomic factors may be considered sensitive. However, the CFPB is mandated to focus on financial risks to vulnerable populations, including service members, older Americans, and lower-income consumers. For this reason, the CFPB often needs to ask these types of sensitive questions. For information collections involving questions of race/ethnicity, the CFPB will ensure that the OMB standards for Classification of Federal Data on Race and Ethnicity (Federal Register, October 30, 1997, Volume 62, Number 210, pages 58781-59790) are followed.

Respondent participation and all activities within the research setting are voluntary, and subjects will be made aware of this fact. All respondents are free to opt-out of this data collection at any time and for any reason. The CFPB will use standard social science research practices to minimize risks of negative impacts to the respondents.

The CFPB will ensure that a citation is made to any applicable System of Records Notice (SORN), and a Privacy Impact Assessment (PIA) in the individual submissions under this clearance and in published research

12. Provide estimates of the hour burden of the collection of information. The statement should:

• Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. General, estimates should not include burden hours for customary and usual business practices.

• If this request for approval covers more than one form, provide separate hour burden estimates for each form.

• Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.

The following tables present estimates of the total number of respondents and burden hours for proposed collection. The number of respondents and average burden per response is based on previous experience fielding surveys of similar length, complexity, and sample size.

Information Collection	No. of Respondents	Frequency (Responses per Respondent)	Total Annual Responses	Average Response Time (hours)	Total Burden Hours
New Survey	3,750	1	3,750	.33	1,237.5

13. Provide an estimate of the total annual cost burden to respondents or record keepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 and 14).

There will be no capital, operating, or maintenance costs to respondents as a result of participation in this survey.

14. Provide estimates of the annualized cost to the Federal Government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), any other expense that would not have been incurred without this collection of information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 into a single table.

These surveys are estimated to cost a total of $563,000.

15. Explain the reasons for any program changes or adjustments.

This is a new data collection

16. For collections of information whose results will be published, outline plans for tabulations, and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

The CFPB’s research projects are intended to expand scientific understanding of consumer decision-making in financial domains. Publication of our research will increase the public transparency about the work that we are doing. Research findings will be published as technical articles that are publicly disseminated as working papers, published in peer- reviewed journals, or published as CFPB white papers or CFPB staff reports. Where appropriate, the CFPB will make versions of the data and analysis available publicly.

Collection, analysis, and publication of data will span the entire period of the anticipated clearance. The Office of Research plans to conduct an ongoing program of research and therefore plans to apply for an extension to the anticipated clearance when it expires.

Because of publication lag, a typical academic journal article is published one or more years after initial submission. Data collection for a professional publication typically takes at least three to four months, and in some cases could be longer. Data analysis and article preparation typically lasts another three to four months. Thus, professional articles in a peer-reviewed outlet of any kind are estimated to be published from 12 months to 36 months from the time that data collection begins.⁵ The publication process for CFPB in-house products is shorter than that for external academic publications. The CFPB may also publish the results of this study on its website or other publication venues, and the research may inform future rulemakings and be cited in those rules as appropriate

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

The CFPB plans to display the expiration date for OMB approval of the information collection on all instruments. Further, the OMB control number and expiration date will be displayed on OMB’s public PRA docket at www.reginfo.gov.

18. Explain each exception to the certification statement.

The CFPB certifies that this collection of information is consistent with the requirements of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an exemption to these certification requirements.

1 Bureau of Consumer Financial Protection Strategic Plan FY 2022 - 2026, Goal 3, https://files.consumerfinance.gov/f/documents/cfpb_strategic-plan_fy2022-fy2026.pdf

2 XX FR XXXXX (published on XX/XX/XXXX).

3 XX FR XXXXX (published on XX/XX/XXXX; comment period ends on XX/XX/XXXX).

4 Consumer Experience Research PIA https://s3.amazonaws.com/files.consumerfinance.gov/f/201406_cfpb_consumer-experience-research_pia.pdf

5 P.K. Trivedi (2006), “An Analysis of Publication Lags in Econometrics” Journal of Applied Econometrics 8(1): 93-100.

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