After four years of leading the fight to protect student loan borrowers, 2021 has seen states across the country continue to take steps to deliver protections and hold companies harming borrowers accountable. The SBPC has worked alongside incredible partners in a dozen states to help craft new legislation and ensure new protections are properly implemented and upheld. Some highlights include:
- Massachusetts and Oregon joined the growing list of states across the country that have passed Borrower Bills of Rights, enabling officials to license and hold student loan servicers operating in their states’ accountable for harming borrowers.
- Illinois, Colorado, and Maine took steps to shed light on the notoriously opaque private student loan market by passing laws requiring companies to register and provide data on their lending activities.
- California, Colorado, and Maine cracked down on abusive private student loan debt collection practices, by passing laws requiring creditors to provide actual documentation when they bring borrowers to court.
Along with legislative action to protect borrowers, state regulators and law enforcement officials were active in 2021, holding bad actors accountable and providing examples for how to deal with risky emerging products that regularly seek to avoid complying with basic consumer protection law. The California Department of Financial Protection and Innovation (DFPI) announced two consent decrees against income-share agreement (ISA) providers, Lambda School and Meratas, Inc, for violating or failing to comply with consumer protection laws. Meanwhile, Colorado’s Consumer Credit Code Administrator began the process of applying the state’s consumer credit laws to ISAs by issuing proposed rules that make clear that ISAs must comply with traditional credit requirements.
The progress made in 2021, built on years of tireless efforts by lawmakers and advocates, is spurring similar action in states across the country. Bills to increase private student loan protections, address harmful transcript withholding policies, and crack down on unscrupulous debt collectors show how states will continue to lead in prioritizing the well-being of borrowers.