Letter to Governors: Support a Student Loan Borrowers' Bill of Rights

1. Support a Student Loan Borrowers’ Bill of Rights to regulate student loan companies

2. Recover tuition for cheated students at for-profit institutions The urgency of these reforms continues to mount as Secretary of Education Betsy DeVos seeks to unravel accountability measures for colleges and loan companies, to embolden predatory for-profit colleges, and even to impede states from protecting their own citizens. We urge you to consider the following policy options to hold for-profit schools that engage in wrongdoing accountable and to protect current borrowers against student loan servicing misconduct. Support a student loan borrowers’ bill of rights to regulate student loan companies: Implementing borrowers’ bills of rights at the state level would help student loan borrowers navigate the repayment process in a way that allows them to pay down debt more sustainably and address servicing issues with a state advocate by their side. An effective student loan borrowers’ bill of rights has four key elements:

3. The use of the state’s licensing authority to establish the regulation of student loan companies and servicers.

4. The establishment of standards of loan servicing that enshrine consumer protections for borrowers and mandate minimum standards for timely payment processing, customer service, and repayment counseling.

5. Regular reporting requirements for student loan data to appropriate state agencies, in order to generate crucial data that regulators can use to detect servicing issues early, and recommend proactive remedies.

6. Establish a student loan ombudsman at the state level, housed in either a state agency or the attorney general’s office, and paid for with the licensing fees paid by student loan companies. This ombudsman could help settle disputes and advocate for borrowers when problems arise.Recover tuition for cheated students at for-profit institutions: In many states today, when a private for-profit college closes with no warning, students are left with few avenues of recourse for getting their money back. While students who attended a closed school may have their federal loans forgiven, there is no process in place to recover tuition money paid by students out of pocket. Similarly, if a college defrauds students it can be very difficult for them to get their money back. These challenges are disproportionately shouldered by the most vulnerable communities, including low-income African American and Latino students. States can ensure students are better protected in case of institutional closure or bad behavior by adopting more robust tuition recovery funds. These are special pools of money set aside to pay students back if their college rips them off or closes suddenly. Though many states currently have a tuition recovery fund, they may not have enough money to help students when needed so states should ensure adequate resources are allocated. If a recovery fund does not work, states could also consider requiring letters of credit from schools. Given the size and scope of the student debt burden in your state, we are hopeful that you will seriously consider these common sense proposals to defend students and borrowers against bad actors and a Department of Education working to dismantle student protections. The student loan borrowers that elected you range from 18-year-old first-time voters to the 3.4 million senior citizens still burdened by their college debt. We hope you will take this opportunity to get to know their struggles and be a champion for them. Signed, Americans for Financial Reform Association of Young Americans Center for American Progress Center for Postsecondary and Economic Success (CLASP) Consumer Action Hildreth Institute National Education Association One Wisconsin Now Public Higher Education Network of Massachusetts Student Action Student Debt Crisis Student Veterans of America The Institute for College Access and Success U.S. PIRG

7. Arizona Public Interest Research Group (Arizona PIRG)

8. California Public Interest Research Group (CalPIRG)

9. Colorado Public Interest Research Group (CoPIRG)

10. Connecticut Public Interest Research Group (ConnPIRG)

11. Florida Public Interest Research Group (FloPIRG)

12. Georgia Public Interest Research Group (Georgia PIRG)

13. Iowa Public Interest Research Group (Iowa PIRG)

14. Illinois Public Interest Research Group (Illinois PIRG)

15. Massachusetts Public Interest Research Group (MassPIRG)

16. Maryland Public Interest Research Group (MaryPIRG)

17. Missouri Public Interest Research Group (MoPIRG)

18. North Carolina Public Interest Research Group (NCPIRG)

19. New Hampshire Public Interest Research Group (NHPIRG)

20. New Jersey Public Interest Research Group (NJPIRG)

21. New Mexico Public Interest Research Group (NMPIRG)

22. Ohio Public Interest Research Group (Ohio PIRG)

23. Oregon Public Interest Research Group (OSPIRG)

24. Pennsylvania Public Interest Research Group (PennPIRG)

25. Rhode Island Public Interest Research Group (RIPIRG)

26. Texas Public Interest Research Group (TexPIRG)

27. Washington Public Interest Research Group (WashPIRG)

28. Wisconsin Public Interest Research Group (WisPIRG) Veterans Education Success Young Invincibles