Domino: A Blog About Student Debt

Unless the administration takes swift and decisive action, cash made available through one of “the most important tools that the nation has in its arsenal to fight poverty” will soon be denied to struggling student loan borrowers and instead intercepted by the Department of Education (ED).

The results of a new investigation published today by the SBPC illustrate yet another way that ISA providers have premised their business on illegal tactics, as well as the broad scope of legal liability that ripples out of these practices for ISA companies and their enablers.

This report examines the continued problems within the credit reporting system with a focus on widespread inaccuracies by companies that furnish credit information, including student loan servicers.

One key area where reform and strengthened consumer protections are needed is the market for school-sponsored prepaid cards and debit cards linked to deposit accounts (“campus cards”). These cards are meant to help students conveniently access money from federal student aid left over after tuition and fees are paid, including...

The practice of building credit products with income-based repayment features and subsequently attempting to evade consumer protection law is rapidly growing. Without action by regulators, ISAs could be the next chapter in the long history of predatory lending.

With respect to student financial services, the need for effective discrimination enforcement is acute: there should be no room for doubt that discrimination is illegal and will be regulated with respect to predatory for-profit schools, exotic education-financing arrangements, fraudulent financial “advisory” services, student-specific consumer reporting, and third-party debt collection of...

The SBPC and coalition partners sent a letter to the Office of the Comptroller of the Currency— the nation’s top bank regulator—urging careful scrutiny of the “partnership” between Blue Ridge Bank, a federally chartered national bank, and MentorWorks, a student financing company that offers ISAs.

Some of the most notorious actors profiting off the student debt crisis are student loan servicers. A a history of lawsuits, shocking investigations, and ruined financial lives makes clear that these companies harm borrowers from the day they get their first bill to the moment they pay off their loans.

Our new report reveals tens of thousands of newly uncovered instances in which federal student loan servicers misreported borrowers’ repayment status to credit reporting agencies in apparent violation of the CARES Act and consumer financial laws such as the Fair Credit Reporting Act.

A growing body of evidence suggests that the student debt crisis is exacerbating America’s stark economic inequalities, with huge consequences for disparities across race and gender.