THE STUDENT BORROWER BILL OF RIGHTS
Assemblymember Mark Stone’s AB 376, the Student Borrower Bill of Rights, will give California borrowers the same type of clear, enforceable rights granted to consumers with credit cards and mortgages.
This groundbreaking legislation will:
California law should be clear: student loan companies cannot pad corporate profits at the expense of borrowers. California needs to set state standards for handling the tens of millions of student loan bills that come due in CA each year, protecting borrowers when paperwork gets botched, when payments get lost, or when loan companies change. These safeguards exist for homeowners with mortgages and consumers with credit cards, but California student loan borrowers lack the same basic protections.
Ban Abusive Practices
California needs to create new, enforceable rights for all California student loan borrowers, including borrowers who have been the victims of industry abuses. California law should ban abusive practices, ensuring these companies never take unreasonable advantage of borrowers who reach out to their student loan company for help. To hold these companies accountable, individual borrowers, regulators, and law enforcement officials should be able to enforce borrowers’ rights under California law.
Create Special Protections for Military Families, Teachers and Other Public Service
Workers, Disabled Borrowers, and Older Americans
The most vulnerable borrowers often have special rights under federal law and in loan contracts, but consumer complaints and government enforcement actions show that industry routinely denies borrowers these rights. California should require student loan companies to train their staff to understand these rights and creates strong new protections to prevent companies from misleading military borrowers, deceiving teachers and public service workers, cheating borrowers with disabilities, and defrauding older Americans.
Create a New Advocate to Stand Up for Borrowers' Rights
California should create a new Student Loan Borrower Advocate to respond to consumer complaints, sound an alarm about new breakdowns and industry abuses affecting borrowers, and refer predatory actors to regulators and law enforcement. The California Student Loan Borrower Advocate will also lead the fight to reform the student loan system by calling for changes in law or policy by the California legislature, California agencies, or federal policymakers. Drawing on the experiences of millions of California borrowers, California’s Student Loan Borrower Advocate will also be a champion for borrowers in the national debate about the future of consumer protection in the student loan system.
Student loan companies thrive in the shadows, leaving borrowers, regulators, and law enforcement officials without the data they need to scrutinize individual companies’ practices and spot emerging risks. By shining light on the system through the creation of a new “report card” for the student loan industry, California will give the public new insight—including when and why student loan borrowers default, and where industry has systematically denied borrowers’ rights to affordable student loan payments. Transparency will also help honest companies compete on a level playing field for the first time.