In a memorandum, Sabita Soneji and Leora Friedman of Tycko & Zavareei, LLP—a leading national law firm working on issues related to consumer financial protection—outline the legal tools the Department of Education, the Consumer Financial Protection Bureau, and even individual borrowers have to hold bad actors accountable for an ongoing scheme to drive students toward predatory private credit.
This memorandum follows an SBPC investigation documenting efforts by American colleges, private contractors called Online Program Managers (OPMs), and private lenders to profit by steering students toward dubious short-term, non-degree granting “bootcamp” programs. In doing so, these actors direct students into massive amounts of harmful “shadow student debt,” an umbrella term for various expensive, misleadingly marketed, and lightly underwritten credit products usually used to prop up abusive for-profit colleges.
Read the Memo: Legal Analysis, and Need for Increased Enforcement, of the Student Loan Sunshine Act
Read the Blog: ED, the CFPB, and Borrowers Can All Hold School and Creditors Accountable for Predatory Lending Schemes
Our initial investigation into predatory practices by public colleges, lenders, and OPMs is available here.
More on the SBPC’s work related to shadow student debt is available here.