MOHELA Once Again Under Fire, This Time for Growing Role in Private Loan Markets
September 17, 2024 | WASHINGTON, D.C. — Moments ago, the U.S. Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protections held the first hearing in over a decade focused solely on the private student loan crisis. Simultaneously, the Student Borrower Protection Center (SBPC) released a new data analysis indicating extreme numbers of outstanding private student loan debt in every state.
SBPC Policy Director Aissa Canchola Bañez testified at the hearing in favor of urgent action by the Committee to protect borrowers with private student loans. From her testimony:
“While other consumer finance markets like mortgage and credit cards have robust data transparency, the absence of comprehensive data in the private student loan space has too often left borrowers, policymakers, and advocates in the dark.
“This has allowed for significant gaps in protections for the millions of Americans forced to take on private student loan debt. And has made it harder for policymakers and law enforcement officials to protect borrowers.”
As seen in SBPC’s data, the private student loan market—which is now larger than the payday loan market and the balance of outstanding past-due medical debt—is a unique locus for borrower harm. In particular, Black, brown, and older borrowers, and other historically-marginalized groups suffer more and more every day due to the lack of consumer protections, transparency, and relief currently provided for private student loan holders.
It is important for the Committee to take swift action as right-wing opponents continue to fixate on not just challenging the Biden-Harris Administration’s efforts to fix the broken student loan system, but also throwing millions of American families into the jaws of the private student loan market.
- View SBPC’s new private student loan state-by-state data here: https://protectborrowers.org/total-private-student-loan-balance-by-state/
- A recording of the full hearing will be made available here: https://www.youtube.com/@senatebankinghousingandurb4992
- Read full written testimony by Aissa Canchola Bañez, SBPC Policy Director here: https://protectborrowers.org/wp-content/uploads/2024/09/Banez_Written-Testimony_PSL-Senate-Banking_9-17-2024.pdf
- Read full written testimony by Dalié Jiménez, Director, Student Loan Law Initiative (SLLI), a joint project between SBPC and the University of California here: https://protectborrowers.org/wp-content/uploads/2024/09/Jimenez_Written-Testimony_PSL-Senate-Banking_9-17-2024.pdf
Further Reading
The MOHELA Papers, a joint investigation into MOHELA by SBPC and AFT, is available at: www.mohelapapers.org
SBPC’s report series on how student loan companies cheat borrowers out of their rights: Delivering Distress: How Student Loan Companies Cheat Borrowers Out of Their Rights
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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.