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Student Borrower Protection Center

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Student Borrower Protection Center
Company typeNonprofit organization
FounderSeth Frotman

Mike Pierce

Bonnie Latreille
Websitehttps://protectborrowers.org

The Student Borrower Protection Center is a nonprofit organization aimed at protecting borrowers of student loans and improving the student loan system.

History

The Student Borrower Protection Center was founded in late 2018 by Seth Frotman, former student loan ombudsman at the Consumer Financial Protection Bureau; Mike Pierce, former lead higher education and consumer protection adviser at the bureau; and Bonnie Latreille, a former advisor to Frotman at the bureau.[1][2][3][4] They formed the Student Borrower Protection Center to address what they perceived as the Trump Administration’s favoritism toward the student loan industry with an aim of assisting student loan borrowers and reducing the growing amount of student debt held by Americans,[2] stating that “the federal government hasn’t just walked away from the fight on behalf of borrowers, it is actually arming the other side.”[5][6] The group also announced a partnership with the University of California, Irvine School of Law aimed at driving academic research on the effects of the student debt crisis.[6]

In July 2021, the Biden Administration announced that Latreille would serve as the U.S. Department of Education’s student loan ombudsman, its top watchdog for the federal student loan program.[7] In October 2021, the Consumer Financial Protection Bureau announced that Frotman would return to the agency to serve as acting General Counsel.[8] Mike Pierce became executive director following Frotman's return.[9][10]

Advocacy efforts

Income driven repayment

The Student Borrower Protection Center worked with the Student Debt Crisis Center, the Center for Responsible Lending, and the National Consumer Law Center to advocate for improvements to the income driven repayment plan system(IDR).[11][12] The suggested improvements include retroactively counting time spent in the plan towards forgiveness, for relief to be granted automatically, and for the program to apply to all federal student loans.[12][13] On April 19, 2022, Secretary of Education Miguel Cardona announced a new initiative modeled on this proposal, promising “[m]ore than 3.6 million borrowers will also receive at least three years of additional credit toward IDR forgiveness.”[14]

Public Service Loan Forgiveness Program

In 2018, the group joined the American Federation of Teachers to launch an investigation into the failure of the Public Service Loan Forgiveness program.[15] Over the course of three years, Student Borrower Protection Center supported litigation by teachers and uncovered evidence of government mismanagement and industry abuses across the student loan system, including evidence that Public Service Loan Forgiveness systematically failed to deliver debt relief to members of the military, as reported by Leslie Stahl on 60 Minutes.[16] In October 2021, the Biden Administration announced an overhaul of the embattled program, promising immediate debt cancellation to tens of thousands of public service workers and additional credit towards loan forgiveness for over half a million borrowers.[17][18]

In 2022, the group released data regarding the Public Service Loan Forgiveness program stating that 9 million public servants are eligible for the loan forgiveness program, however, only 15% have filed paperwork related to the relief program and only 2% have received said relief.[19][20] The group has also partnered with a coalition of labor unions representing public sector employees to raise awareness and enrollment in the Public Service Loan Forgiveness program.[19]

Student loan debt relief

At the beginning of the COVID-19 pandemic, the center was a proponent for blanket relief for student loan borrowers, arguing that “lenders should immediately and automatically implement payment relief measures and protections against late fees, damaged credit, and other negative consequences for all delinquent borrowers across their entire loan portfolios.”[21] From 2020 to 2022, the center issued multiple letters to President Biden, co-signed by hundreds of organizations, calling on the President to extend the pause on student loan payments that is currently set to expire August 31, 2022.[22][23][24][25] The organizations advocate for the President to extend the pause until he follows through on his campaign promise to cancel student debt for all borrowers.[26][24][22]

Educational redlining

In 2020, the center launched an investigation into a practice the group calls “educational redlining,” identifying cases where banks and financial firms charge people who attend Historically Black Colleges and Universities more money for student loans and other financial products compared to people who attend majority-white colleges.[27]  This investigation spurred the Senate Banking Committee to launch a probe into the practice.[28] In 2021, the group joined NAACP Legal Defense Fund to enter into an agreement with Upstart Holdings, a company identified in the group’s 2020 investigation.[29] The settlement subjects Upstart’s lending business to independent monitoring by civil rights law firm Relman Colfax.[29]

Income share agreements

In 2020, the group filed a complaint with the Federal Trade Commission accusing income-share agreement servicer Vemo Education of engaging in deceptive marketing practices.[30] Vemo was servicer of the now-suspended Purdue University Back a Boiler income share agreement program. The Student Borrower Protection Center was critical of the Back a Boiler program, sending a letter to the Department of Education and the Consumer Financial Protection Bureau accusing the university of violating the Higher Education Act.[31][32]

References

  1. ^ Cowley, Stacy (2018-08-27). "Student Loan Watchdog Quits, Saying Trump Administration Is Harming Students". The New York Times. ISSN 0362-4331. Retrieved 2022-08-07.
  2. ^ a b Cowley, Stacy (2018-11-28). "A Student Loan Help Center, Created by Critics of Trump's Enforcement Efforts". The New York Times. ISSN 0362-4331. Retrieved 2022-08-07.
  3. ^ Dayen, David (2022-03-28). "Washington's Best Hope". The American Prospect. Retrieved 2022-08-07.
  4. ^ "Former CFPB Official Launches "Protection Center" for Student Borrowers". www.nasfaa.org. Retrieved 2022-08-07.
  5. ^ "Former govt. student loan official opens new organization". AP NEWS. 2018-11-28. Retrieved 2022-08-07.
  6. ^ a b Friedman, Zack. "Your Former Student Loan Watchdog Is Back". Forbes. Retrieved 2022-08-07.
  7. ^ "Education Department's Student Aid Office Adds Experienced Leaders". www.ed.gov. Retrieved 2022-08-07.
  8. ^ "CFPB announces key leadership changes". JD Supra. Retrieved 2022-08-07.
  9. ^ "Student Borrower Protection Center Announces New Leadership". Student Borrower Protection Center. 2021-10-20. Retrieved 2022-08-07.
  10. ^ "Mike Pierce - Practising Law Institute". www.pli.edu. Retrieved 2022-08-07.
  11. ^ Sheffey, Ayelet. "Student-loan forgiveness for millions of low-income borrowers could be jeopardized by 'harmful servicing practices,' 4 advocacy groups say". Business Insider. Retrieved 2022-08-07.
  12. ^ a b "Proposed IDR Waiver Promises Debt Forgiveness". www.bestcolleges.com. 2022-01-18. Retrieved 2022-08-07.
  13. ^ "Advocacy groups call on California lawmakers to pass the Student Borrower Bill of Rights". CR Advocacy. Retrieved 2022-08-07.
  14. ^ "Department of Education Announces Actions to Fix Longstanding Failures in the Student Loan Programs". www.ed.gov. Retrieved 2022-08-07.
  15. ^ "AFT and SBPC Uncover New Evidence of Mismanagement and Abuse in Scandal-Plagued Public Service Loan Forgiveness Program". American Federation of Teachers. 2020-08-12. Retrieved 2022-08-07.
  16. ^ "Military members promised student debt relief in exchange for ten years of public service say promise is often broken". www.cbsnews.com. Retrieved 2022-08-07.
  17. ^ Smith, Ashley A. "UPDATE: Biden administration overhauls Public Service Loan Forgiveness program". EdSource. Retrieved 2022-08-07.
  18. ^ Quintana, Chris. "Student loan forgiveness has arrived for 70,000 borrowers working public service jobs". USA Today. Retrieved 2022-08-07.
  19. ^ a b Friedman, Zack. "9 Million Borrowers Now Qualify For Student Loan Forgiveness". Forbes. Retrieved 2022-08-07.
  20. ^ "Over 9 million student-loan borrowers are eligible to get their debt wiped out — but fewer than 2% of them have actually gotten that relief, new report finds". news.yahoo.com. Retrieved 2022-08-07.
  21. ^ Dayen, David (2020-04-22). "Unsanitized: Why Relief for Mortgage and Student Loan Borrowers Must Be Automatic". The American Prospect. Retrieved 2022-08-07.
  22. ^ a b "Sign-on Letter: Over 415 Orgs Call on President Biden to Cancel Federal Student Debt Immediately via Executive Action". Americans for Financial Reform. 2021-04-13. Retrieved 2022-08-07.
  23. ^ "Sign-on Letter: Over 235 Orgs Call on President-Elect Biden to Cancel Federal Student Debt on Day One using Executive Action". Americans for Financial Reform. 2020-11-18. Retrieved 2022-08-07.
  24. ^ a b Sheffey, Ayelet. "Student-loan borrowers shouldn't have to pay off debt Biden 'has promised to cancel,' 180 organizations say — and they're calling for another payment-pause extension". Business Insider. Retrieved 2022-08-07.
  25. ^ Figueroa, Ariana (2021-12-21). "Biden administration resists Democrats' pleas on student debt relief as deadline nears". Ohio Capital Journal. Retrieved 2022-08-07.
  26. ^ "Unions lobby Biden for bolder approach to student debt relief". POLITICO. Retrieved 2022-08-07.
  27. ^ "Graduates Of Historically Black Colleges May Be Paying More For Loans: Watchdog Group". NPR.org. Retrieved 2022-08-07.
  28. ^ "Brown, Senate Democrats Press Upstart, Lenders for Answers Following Reports of Higher Interest Rates for Students of Minority-Serving Institutions". www.banking.senate.gov. Retrieved 2022-08-07.
  29. ^ a b Berman, Jillian. "Do AI-powered lending algorithms silently discriminate? This initiative aims to find out". MarketWatch. Retrieved 2022-08-07.
  30. ^ Swaminathan, Aarthi. "Purdue graduate slams alternative student loan, suspended by the university: 'It was extremely difficult, before I got my monthly payments down, to be able to pay rent, buy food'". MarketWatch. Retrieved 2022-08-07.
  31. ^ "Purdue pauses new income-share agreement enrollments". www.insidehighered.com. Retrieved 2022-08-07.
  32. ^ "Purdue University Suspends Income-Share Agreements, Its Loan Alternative - EdSurge News". EdSurge. 2022-06-24. Retrieved 2022-08-07.
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