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Media Press Releases Student Loan Borrowers Fall Prey to Widespread Industry Abuses, Nationwide Analysis of Consumer Complaints Finds

Student Loan Borrowers Fall Prey to Widespread Industry Abuses, Nationwide Analysis of Consumer Complaints Finds

Student Loan Borrowers Fall Prey to Widespread Industry Abuses, Nationwide Analysis of Consumer Complaints Finds

SBPC Report Looks Back at One Year of Consumer Complaints, Former Student Loan Watchdog Calls on State Regulators to Demand Accountability as Washington Fails to Act

DECEMBER 11, 2018 | WASHINGTON, D.C. – Today, the Student Borrower Protection Center released a new report documenting widespread abuses across the student loan industry, as described by more than 13,000 student loan borrowers who submitted complaints to the federal Consumer Financial Protection Bureau (CFPB) last year. Borrowers across the country describe being squeezed between mounting debt and predatory companies. Complaints show problems for servicemembers and veterans seeking protections earned through military service, older borrowers trapped in high-rate private student loans as they enter retirement, and teachers stymied when seeking benefits intended to reward their public service. Despite being required by federal law to produce an annual report documenting borrower complaints, the Trump Administration has failed to do so since assuming control over the CFPB more than one year ago—ignoring mounting evidence of the nation’s growing student debt crisis. The SBPC was founded by former CFPB officials, whose reports, issued each year since the office was created, helped lead to $750 million for students.

“Today’s report shows that borrowers in communities across the country are facing a student debt crisis and are pleading for help,” said Seth Frotman, Executive Director of the Student Borrower Protection Center and former CFPB Student Loan Ombudsman. “Documenting abuse sand listening to consumers should be a job for the federal government, yet even as Washington turns a blind eye and a deaf ear, leaders in states across the country are paying attention. State leaders are ready to demand accountability from the student loan industry and this report will give them new insight into borrowers’ struggles as they fight for reform in their own communities.”

Today’s report, A Year Without Action: An Analysis of Borrower Complaints, is available at:

The Dodd-Frank Wall Street Reform and Consumer Protection Act created a Student Loan Ombudsman at the CFPB to accept complaints from individual student loan borrowers, analyze these complaints, and make recommendations to directly to Congress and Cabinet-level government officials to drive reforms across the student loan system. Between 2011 and 2017, the Student Loan Ombudsman issued more than a dozen reports and drove actions and reforms that returned more than $750 million to individual student loan borrowers across the country. Since President Trump appointed OMB Director Mick Mulvaney to lead the Consumer Financial Protection Bureau one year ago, the Bureau missed an October deadline to issue this report as required by Congress. 

The SBPC report evaluates complaints from more than 13,000 student loan borrowers, including 7,000 borrowers with federal student loans, 5,000 borrowers with private student loans, and 2,000 borrowers who complained about a debt collector that was collecting on a student loan. These include:

  • Complaints from every type of borrower. The report issued today shows that borrowers across the country, with a diverse range of backgrounds and circumstances, fall prey to abuses by student loan companies. Servicemembers and veterans describe barriers to receiving protections meant to ease the financial burdens of military service. Older borrowers who cosign private loans describe obstacles that force them to carry these debts into retirement. Teachers detail breakdowns that delay or deny access to benefits earned through their public service. Together, these complaints offer a clear view of the breadth of the student debt crisis.

  • Complaints about every type of student loan. Complaints from student loan borrowers demonstrate that the student debt crisis affects borrowers with every type of student loan. Borrowers’ complaints include problems with the servicing and debt collection of newer federal student loans made directly by the U.S. Department of Education, older federal loans made by banks and private lenders with a federal government guaranty, and private student loans made by big banks, and by small state-backed lenders. The new report also highlights problems students encounter when confronted with unaffordable bills from colleges and universities pursuing dubious debts owed to cover unpaid expenses—these debts may lead schools to restrict borrowers’ access to transcripts and deny borrowers who are seeking to transfer credits, compounding their financial distress.
  • Complaints from borrowers at every stage of repayment. Law enforcement officials across the country have alleged abuses by student loan companies affecting borrowers from when they first receive a loan, to the moment when they leave school and begin repayment, through the day they try to pay off their debt. As student loan companies face charges of widespread illegal practices in courtrooms nationwide, borrowers continue to identify a staggering range of breakdowns and barriers.  These problems include runarounds and red tape as borrowers seek affordable loan payments, lost paperwork and needless delays when pursuing Public Service Loan Forgiveness, and a byzantine system that drives borrowers, including members of the military, to default, even when they ask their servicer for help.

Failing to provide a report to Congress leaves Congress and the public in the dark about the problems individual student loan borrowers experience across the country. This report sheds new light on the student debt crisis, exposing the cost to student borrowers from the Trump Administration’s continued inaction.

In the face of continuing systemic abuses across the student loan industry, state governments are taking action to expand protections for student loan borrowers and halt illegal practices by predatory companies. Last month, the Student Borrower Protection Center launched States for Student Borrower Protection, a new initiative designed to support the leaders in and out of government working to end the student debt crisis through action at the state level. This new report offers further evidence that state action is urgently needed.

The report is part of an ongoing series of original research, additional projects, and campaigns by SBPC designed to help student loan borrowers by shedding light on the crisis and empower advocates. SBPC also engages directly with those on the frontlines of the crisis.


About the Student Borrower Protection Center (SBPC):

The Student Borrower Protection Center ( is a nonprofit organization solely focused on alleviating the burden of student debt for millions of Americans. SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students. Led by the team of former federal regulators that directed oversight of the student loan market at the Consumer Financial Protection Bureau, SBPC exposes harmful and illegal practices in the student loan industry, drives impact litigation, advocates on behalf of student loan borrowers in Washington and in state capitals, and promotes progressive policy change. SBPC accomplishes these goals by partnering with leaders at all levels of government and throughout the nonprofit sector.

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