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Media Press Releases SBPC Uncovers Pervasive Use of Training Repayment Agreement Provisions to TRAP Workers in Low-Paying Jobs Through Student Debt; Launches Campaign to Collect Worker Stories

SBPC Uncovers Pervasive Use of Training Repayment Agreement Provisions to TRAP Workers in Low-Paying Jobs Through Student Debt; Launches Campaign to Collect Worker Stories

SBPC Investigation Estimates That Major Employers Rely Upon TRAPs In Segments of The U.S. Labor Market That Collectively Employ More Than 1-In-3 Private-Sector Workers

July 28, 2022 | WASHINGTON, DC The Student Borrower Protection Center (SBPC) today released a new report documenting the widespread and accelerating use of Training Repayment Agreement Provisions (TRAPs) by big businesses, which often control a large market share of their respective industry, affecting millions of workers every day—from trucking companies, to hospital operators, to retailers, and even financial services firms. The SBPC estimates that major employers rely upon TRAPs in segments of the U.S. labor market that collectively employ more than 1-in-3 private-sector workers.

Although employers argue that these provisions are a useful way to recoup the cost of teaching useful skills to employees who may depart sooner than anticipated, TRAPs are instead often used to trap people in poor working environments and low-paying jobs. In other words, TRAPs function in the real world as a penalty for leaving a job. And, even if this TRAP is not enforced, its presence has the power to accomplish the intended consequence of pressuring workers into staying.

This scheme may sound familiar—TRAPs are often structured with the stifling of labor market competition in mind, in an attempt to evade existing state and federal worker protections including state-level bans on non-compete clauses.

A copy of SBPC’s new report on TRAPs, Trapped at Work: How Big Business Uses Student Debt to Restrict Worker Mobility, is available here:

The report is being released on the same day a former PetSmart pet groomer filed a groundbreaking class action lawsuit against the retail pet supply giant, alleging that the firm is engaged in a scheme to trap trainee pet groomers in their low-wage jobs by levying thousands of dollars in abusive and unenforceable debts against them.

The lawsuit alleges that PetSmart uses a TRAP to limit groomers from seeking out better working conditions, locking low-wage workers for years into high-volume groomer jobs that can be grueling and dangerous. For groomers who quit within two years of training, PetSmart may use debt collectors to pursue them for training debts that can total more than $5,000.

A copy of the complaint in Scally v. PetSmart, filed today in San Mateo County Superior Court in California, is available at:

New Campaign Seeks to Connect Workers Harmed by Traps With Federal Regulators

As TRAPs increasingly become a more prominent contractual weapon that corporations use to restrict worker mobility, it’s time for watchdogs and policymakers at every level to take action, protect workers, and hold industry accountable for weaponizing debt as a tool to hold back labor.

That is why in conjunction with this report, the SBPC is partnering with United for Respect to launch a new campaign to connect individual workers—including current and former PetSmart Groomers—with federal regulators, setting the stage for a federal crackdown on these abusive contracts. 

Workers harmed by employer-driven debt, including TRAPs, can share their story with the CFPB here.


Dialogue surrounding America’s student debt crisis usually focuses on the $1.6 trillion balance of federal student loans, and sometimes on the additional $140 billion balance of outstanding private student loans. But as the Student Borrower Protection Center has documented before, there is also a “shadow” student debt market that extends beyond brand-name private student loan companies and sometimes even from the legal definition of a private education loan.

A growing body of evidence indicates that employers nationwide are utilizing shadow student debt to trap workers into unfair contracts and substandard working conditions. Training Repayment Agreement Provisions are a key mechanism that employers use to turn on-the-job education into a predatory debt trap. Simply put, TRAPs are terms tucked into workers’ employment contracts stipulating that an employer can demand repayment for the so-called cost of “training” received during the course of employment when a worker attempts to quit their job. The training in question can range from preparation for a recognized credential to extremely basic and firm-specific orientation programs.

If workers bound by a TRAP attempt to leave their jobs, the cost that they will be on the hook for can quite literally be made up by the employer, with sky-high interest rates, attorney fees, collection fees, and the ability of employers to withhold final paychecks and retirement balances added in.

TRAPs impose significant financial burdens on workers and foster monopsony in labor markets by reducing worker mobility and bargaining power. Consumer watchdogs and policymakers at all levels must act to protect borrowers before TRAPs and other predatory contract terms like them become even more widespread.

To learn more about the SBPC’s work on TRAPs:


About Student Borrower Protection Center

The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The 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.

Learn more at or follow SBPC on Twitter @theSBPC.

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