HB 920 Would Require All Maryland Institutions to Report on School-Based Debts
April 2, 2025 | WASHINGTON, D.C. — The Maryland Senate Education, Energy, and the Environment Committee heard HB 920 today—a bill that requires all Maryland institutions to annually report on school-based institutional debts. At the same time, Student Borrower Protection Center (SBPC) released previously undisclosed records obtained via the Maryland Public Information Act (MPIA) with institutional debt data from five schools. SBPC’s Legal Director, Winston Berkman-Breen, testified before the Senate Committee.
SBPC’s MPIA analysis is available here: https://protectborrowers.org/wp-content/uploads/2025/04/MD-institutional-debt-analysis.pdf
Written testimony on HB 920 by Winston Berkman-Breen, SBPC Legal Director, is available here:
https://protectborrowers.org/wp-content/uploads/2025/04/2025.04.02-Written-Testimony-HB-920-1.pdf
“When a student withdraws due to illness or some other hardship, their financial aid is turned into a debt owed directly to the school—debt that can trigger on-campus punishment, collection calls, and even lawsuits,” said SBPC Legal Director Winston Berkman-Breen. “When schools penalize these students to compel immediate repayment, it makes it harder for the students to finish their education and get the jobs they need to repay these debts. Maryland has a chance to sunlight this backwards system and let policymakers decide what additional consumer protections are needed.”
Previous studies estimate that Maryland colleges and universities run a $332 million shadow student debt market comprising these school-based institutional debts. The little data that does exist on institutional debt nationally suggests that low-income students, women, and Black borrowers owe an outsized share of this debt.
SBPC’s report compiles the results of 12 MPIA requests sent to public institutions related to these “institutional debts.” Of the 12 institutions, only five provided data, underscoring the need for an annual reporting requirement. Of the five institutions, only one responded to SBPC’s request for demographic information related to who owes these debts. That institution revealed:
- Pell Grant recipients owe nearly twice as much as non-Pell recipients, and more than four times more in housing debt.
- Nearly four times as many women owed debt to their school as men.
- Black students owe at least three times as much housing debt as students of other races.
These findings are supported by a study commissioned by the Virginia legislature in 2022. The proposed bill in Annapolis, HB 920, would require annual public reporting similar to the Virginia report. The bill is sponsored by Delegates Spiegel, Kaufman, Lopez, and Terrasa, and passed the House of Delegates by a vote of 131 to 7.
Background
Sitting in the shadow of the nation’s $1.7 trillion student debt crisis lies a web of other debt and credit that is often overlooked by lawmakers, regulators, and enforcement officials. Used by students and their families to pay for college degrees and professional training, this underworld of debt and credit has largely evaded regulatory and public attention. These products range from exotic private student loans and personal loans, to special credit cards designed to pay for college, Income Share Agreements, and debts owed directly to schools for unpaid tuition bills. These forms of credit—collectively referred to as “shadow student debt”—are often expensive, risky, and misleadingly marketed, and in some cases structured in a deliberate scheme to evade rights guaranteed to student loan borrowers under the law.
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.