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Media Press Releases New York State Legislators Introduce Most Aggressive Student Loan Borrower Protection Agenda in the Country

New York State Legislators Introduce Most Aggressive Student Loan Borrower Protection Agenda in the Country

Advocates Release New Report Showing Abuses by Student Loan Companies in New York’s Communities of Color; Host Panel Event to Highlight Suite of Consumer Protection Bills to be Introduced in Albany

MARCH 26, 2021 | ALBANY, N.Y. – With 2.3 million New Yorkers owing nearly $100 billion in student loan debt, legislators in Albany are slated to pursue an aggressive agenda to protect borrowers against predatory student loan companies. To highlight this package of legislation during a time when so many borrowers are in need of more action by their elected leaders, the Student Borrower Protection Center (SBPC), Young Invincibles, Community Service Society of New York, and New Yorkers for Responsible Lending (NYRL) are hosting a virtual event entitled New York’s Student Debt Crisis: How Policymakers and Advocates are Partnering to Protect Borrowers. The event will feature New York lawmakers who are currently leading the fight to tackle the most pressing consumer protection issues facing students and student loan borrowers, including ending predatory private lending, banning abusive collection practices like transcript withholding, and prohibiting mandatory arbitration clauses in college enrollment agreements. Collectively, the legislation is among the most comprehensive, progressive agendas by any group of lawmakers in the country fighting to protect student loan borrowers. Following a 45-minute discussion with legislators, the organizations will host a second panel of advocates to speak on the need for local and state action to end New York’s student debt crisis, particularly within New York’s communities of color.  

Watch today’s event live at 12:00pm: 

In conjunction with this event, the organizations jointly released a new report highlighting the ways in which private student loan debt collectors exploit loopholes in state courts to sue for debts that borrowers may not even owe. The report finds that many of these cases are targeted in New York’s communities of color. In a case study of one private student loan entity notorious for collecting on dubious debts—the National Collegiate Student Loan Trusts—more than 44 percent of lawsuits filed were in majority-minority counties, many resulting in default judgments that lead to wage garnishment. The report calls for reforms to the state’s court system to ban these collection practices once and for all.

Read the report: Dubious Debts: Ending an era of illegal private student loan debt collection practices

“For years, New York has fought against abusive and predatory practices in every sector of the higher education finance market,” said Seth Frotman, Executive Director of the Student Borrower Protection Center. “With this set of legislation, New York is once again showing the rest of the country not only what can be done, but what should be done to protect borrowers.”

“Even as we push for the cancellation of federal student debt, we know that many borrowers in New York will still have educational debts that prevent them from completing their degree and finding stability,” said Marissa Muñoz, Northeast Regional Director for Young Invincibles. “New York should be a leader in supporting student borrowers, and closing the racial wealth gaps exacerbated by our nation’s student debt crisis.” 

“Higher education debt is impacting New Yorkers in unimaginable ways. It is risking the financial security of students and families. New York State must continue to enact the consumer protections needed to ensure individuals can attain economic mobility and security.  Failure to do so will only risk our economic recovery, particularly post COVID,” said Carolina Rodriguez, Director of the Education Debt Consumer Assistance Program (EDCAP), a program of the Community Service Society of New York

“New Yorkers for Responsible Lending strongly supports the proposed Borrower Bill of Rights for borrowers and cosigners with private student loans,” said Chuck Bell, programs director for Consumer Reports. “From our 160-member coalition’s work across New York state, we know that many borrowers and cosigners are struggling with loan repayment, and facing unfair practices in debt collection and loan servicing. These bills establish strong, fair ground rules for private student loan companies, so that they will more fully respect consumer rights, and work fairly and consistently with borrowers when they face financial challenges in repaying their loans.”

Student loan borrowers across New York continue to suffer under the weight of mounting debt and face new hurdles from predatory companies. Findings from this report show that unscrupulous practices are adding insult to injury as borrowers struggle to repay this debt during a global pandemic. Both federal and state action is needed if we hope to end the nation’s student debt crisis. The SBPC, YI, CSS, and NYRL applaud Senators Thomas and Stavisky, and Assemblymembers Epstein and Zebrowski for their continued efforts to end the student debt crisis in New York. Their robust legislative agenda includes:

  • Ending transcript withholding: Millions of students are currently being denied access to their transcripts because of outstanding debts owed to their schools for as little as $25, denying them the option to re-enroll and finish their degree or get a job. Senator Thomas is leading the charge in New York to outlaw this practice to give students a second chance. Additionally, this legislation wipes the slate clean for students who already completed 75% of their education by waiving tuition if they re-enroll to complete the rest of their degree. 
  • Banning mandatory arbitration clauses in college enrollment agreements: For too long, for-profit schools have been able to get away with offering poor education and defrauding students by silencing them via mandatory arbitration clauses. Senator Stavisky and Assemblymember Epstein are fighting to end this practice in New York by banning schools that receive state funds from including arbitration clauses in their enrollment agreements. 
  • Expanding protections for private student loan borrowers: Private student loans lack many of the same protections and safeguards as federal student loans, often leaving borrowers vulnerable to predatory practices as they seek to repay these loans. New legislation introduced by Senator Thomas and Assemblymember Zebrowski will create strong, comprehensive protections for private student loan borrowers, ranging from establishing rights for cosigners and borrowers with total and permanent disabilities to ending bait-and-switch tactics at origination that leave older borrowers on the hook for debts through retirement. 
  • Banning for-profit schools from engaging in unfair practices: For-profit schools have long engaged in unfair practices that have left borrowers on the hook for tens of thousands of dollars in debts while holding worthless degrees. Currently under New York law, borrowers cannot individually pursue claims against these schools for unfair practices. But new legislation from Senator Thomas and Assemblymember Epstein changes this by amending New York law to ban unfair practices. Additionally, this legislation holds unscrupulous third-party companies like lead generators or cohort default rate manipulation companies liable for any harm caused to the borrower. 
  • Ending abusive private student loan debt collection practices: As today’s report details, private student loan collectors often pursue borrowers for unsubstantiated debts, specifically targeting lawsuits in communities with the least access to legal representation in hopes that they can get default judgments. As a result, borrowers end up with wages garnished for debts they may not even owe. Upcoming legislation from Senator Thomas and Assemblymember Zebrowski will outlaw these practices once and for all by establishing new requirements for what collectors must prove before they can pursue a borrower in court for a debt. 


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.

About Young Invincibles (YI): Young Invincibles ( is a national nonprofit dedicated to amplifying the voices of young adults in the political process and expanding economic opportunity for our generation. Based in Washington, DC, YI leads federal and state campaigns to support young adults in New York, California, Texas, Colorado, and Illinois.

About Community Service Society of New York (CSS): The Community Service Society of New York ( is an informed, independent, and unwavering voice for positive action representing low-income New Yorkers. CSS addresses the root causes of economic disparity through research, advocacy, litigation, and innovative program models that strengthen and benefit all New Yorkers. 

About New Yorkers for Responsible Lending (NYRL): New Yorkers for Responsible Lending ( is a statewide coalition that promotes access to fair and affordable financial services and the preservation of assets for all New Yorkers and their communities. NYRL is committed to fighting predatory practices in the financial services industry through policy reform, education and outreach, research and direct services. NYRL’s 160 members represent community financial institutions, community-based organizations, affordable housing and first-time homebuyer groups, advocates for seniors, legal services organizations, and community reinvestment, fair lending, and consumer advocacy groups.

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