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Private Student Loans

The private student loan market has seen rapid growth over the last decade. Today, student loan borrowers owe over $140 billion in private student loans. These loans often carry high interest rates and contain fewer rights and protections for borrowers than federal student loans. This market also lacks basic transparency and reporting requirements.  For these reasons, borrowers face a substantially heightened risk of harm as predatory actors are allowed to flourish.

The SBPC is working to shine light on the private student loan market and expose predatory players.

Our Work:

Private Student Lending

This report documents the rapid growth of the private student loan market and demonstrates why there is a desperate need for accountability and reforms to protect the millions of borrowers whose lives are impacted by this market.

Shadow Student Debt

This report examines the web of predatory schools and financial services firms that drive students to take on risky, high-cost shadow student debt.

State Action to Protect Private Student Loan Borrowers

States are stepping up to protect borrowers with existing debt from abuses by lenders, servicers, debt buyers, and debt collectors, and taking action to make new loans safer, and rein in the worst abuses by companies across the lifecycle of a private student loan.

Private Student Loan Collections Issue Brief: Maryland Spotlight

In an issue brief, the SBPC shows how private student loan collection practices are harming borrowers across the country — with a spotlight on Maryland borrowers.

Educational Redlining

The SBPC’s analysis of fintech and banking products uncovered cases where a prospective borrower may be hit with thousands of dollars in additional credit costs if he or she attended a community college, an Historically Black College or University (HBCU), or an Hispanic-Serving Institution (HSI).

The CARES Act Leaves Behind Millions of Student Loan Borrowers

As the world grapples with the fallout of the coronavirus pandemic, student loan companies cannot be allowed to continue making billions on the plight of student loan borrowers. And yet, even for many borrowers of federal student loans, this is precisely what the CARES Act will permit.

Private Student Loans: New Report Sheds Light on the Need for Borrower Protection in an Opaque $130 Billion Market

The report offers a snapshot of recent trends and borrower outcomes in the space, indicating a critical need for more rigorous borrower protection at the federal, state, and local level.

Private Student Loans in the News:

‘Shadow’ Lenders Can Leave College Students in the Dark

Thirty-eight percent of students borrow additional money for college via credit cards, home equity loans and other non-student loans, according to a May 2020 report from the Federal Reserve. The SBPC has dubbed this the “shadow education finance market” because these options can lack transparency.


A $5 Billion ‘Shadow Debt’ Market is Helping Keep For-Profit Colleges Afloat, New Report Charges

Over the past decade, students have borrowed more than $5 billion through an opaque web of companies to pay for training at for-profit schools, the Student Borrower Protection Center, an advocacy group, found. These products, which aren’t traditional federal or private student loans, often carry high interest rates and other risks for borrowers, according to the SBPC. 

Coronavirus Shutdown: Consumer Advocates Worry About $100 Billion Private Student Loan Market

Presently there are more than 43 million Americans with $1.5 trillion in student loan debt. Federal loans form $1.3 trillion of that, and as Frotman indicated, a sizable portion of the remainder comprise of private education loans.

The Stimulus Act Shows Us the Risks for Private Student Loans

But for millions of people whose student loans are from private lenders such as Wells Fargo, Sallie Mae, or SoFi, the package, which is intended to alleviate financial pressures caused by the coronavirus pandemic, brings no relief.

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