Advocates Sound Alarm on PayPal’s Education Financing Partnerships with Over 150 For-Profit Schools
The SBPC, Allied Progress, Americans for Financial Reform Education Fund, and Student Debt Crisis sent letters to the CEO of online payments company PayPal, Inc. and to the federal financial regulators overseeing the company, warning that the tech firm’s practices may cause significant harm to borrowers attending for-profit schools. An SBPC investigation found PayPal Credit, a high-cost, digital credit product, is used by over 150 for-profit schools as a means to finance tuition. With exorbitant interest rates, fees, and other risky features, the groups warn of the significant consumer harm that PayPal Credit may cause students and call for an immediate investigation into the company and swift action to remedy the risks that PayPal Credit poses for consumers.
Last month, the SBPC published a report examining the universe of often exploitative debt and credit products targeted toward students attending for-profit schools. The SBPC report found that millions of students have taken on billions of dollars in so-called “shadow student debt.” PayPal was one of the most prominent companies driving students to take on these risky debts.
Read: Letter to CFPB Director Kathleen Graninger and Acting Comptroller of the Currency Brian Brooks
Read: Letter to PayPal President and CEO Daniel Schulman
Read: List of 150 institutions and programs advertising PayPal Credit as a method for tuition financing
Read the Press Release: PayPal’s Partnerships With Over 150 For-Profit Schools Drive Students to Take on High-Cost Education Debt, Advocates Warn
Read the SBPC’s report on Shadow Student Debt