How MASSPIRG and our student partners teamed up to take on deceptive student loan practices

In the last two decades, student debt has grown faster in Massachusetts than in almost any other state.

One reason so many of our students and graduates are drowning in debt? Some student loan servicers take advantage of borrowers through unfair, predatory and even illegal lending methods.

It’s a problem MASSPIRG and our partners have been working to solve for years — and our efforts were rewarded this past January, when the Student Loan Borrower Bill of Rights was passed by the Legislature and then signed into law by Gov. Charlie Baker. Nearly 1 million student borrowers across the commonwealth now have the protections they deserve against deceptive lending practices.

We talked with MASSPIRG Legislative Director Deirdre Cummings about what it took to secure this win — which came at the 11th hour of the 2019-2020 legislative session — and what it’ll mean for the Bay State. Here’s a summary of our conversation:

The Student Loan Borrower Bill of Rights as we know it today has been around for years, but in Massachusetts it was first filed as a bill in the legislature in 2017. What called our attention to the issue was less a specific event or moment where we felt we needed to act, and more a case of deceptive lending practices being such a clear-cut example overall of the need for organizations like ours to stand up for consumers. It’s a billion-dollar industry taking advantage of people with practically no regulation — and that’s exactly the type of predatory practice that MASSPIRG aims to stand up to.

We’ve heard stories about student loan servicers botching paperwork resulting in higher fees; misleading borrowers into opting for more expensive loans; and failing to inform borrowers about income-based repayment options or programs to relieve debt in exchange for working in public service — which borrowers are legally entitled to. Then, when borrowers can’t pay, servicers may threaten, coerce or harass them. According to the Consumer Financial Protection Bureau (CFPB), almost two-thirds of the complaints filed by student borrowers last year were related to problems with loan servicing.

Plus, we knew the specific solution of instituting a borrowers bill of rights could work — it’s similar to consumer protections used in other financial products and practices, and ConnPIRG and ConnPIRG Students helped pass a successful Student Borrower Bill of Rights in Connecticut in 2015.

But we’ve also been working on the issue of student loans since long before the Student Borrower Bill of Rights came into being. For as long as PIRG has been around, student advocacy has been a crucial part of our mission. And in turn, as long as deceptive student loan lending practices have been a problem, students have been organizing to secure better protections. (One major contributor in recent years: a federal bill that made it so that private student loans could no longer be discharged — meaning lenders had few disincentives to overlend or lend to those who wouldn’t be able to pay back.) MASSPIRG has a history working with our student partners on federal-level protections, as well as taking on for-profit colleges taking advantage of students — especially veterans — by selling them on empty promises to get them to take out more loans.

To start, the problem got worse over the past five years, as college costs continued to soar and the student loan ombudsman for the Trump administration’s CFPB resigned in protest of the administration “turning its back” on borrowers. Predatory lending became more common as a result, so the movement for state action took on a renewed urgency. And in addition, the COVID-19 crisis elevated the need for reform, given the extra financial pressure many borrowers and their families were finding themselves under.

But just as important was the broad base of support the reform was gaining in the Legislature. Every time we spoke with a lawmaker about the need for student lending reform, they had personal experience to share about problematic lenders that either they or their kids had encountered. It was clear the problem was so real to so many lawmakers — especially the Borrower Bill of Rights’ cosponsors, state Sen. Eric Lesser of Longmeadow and state Rep. Natalie Higgins of Leominster, who were relentless in their efforts to make it the law of the land.

The breadth and strength of our coalition (more than 50 organizations and leaders, who lobbied, testified before committees, signed letters, and urged their members to reach out to their lawmakers) were crucial factors. So was the Fund for the Public Interest Foundation’s Calling for Action program, which donated over $36,000 of patch-thru calling to the Hildreth Institute and Zero Debt Massachusetts in order to lobby legislative support for the bill.

Another key player: Some 150 college student leaders from MASSPIRG Students chapters across the state who mobilized in support of the bill.

They absolutely played a critical role by elevating the student leader voice, and doing so in a way that was both positive and persuasive. They testified at public hearings, and they were able to mobilize student leaders from over a dozen campuses. Which was another great way to connect with the Legislature — many of our lawmakers went to the same Massachusetts schools that we have student leaders at, which made them appreciate what the students were saying that much more.

But it wasn’t just that our student partners could organize — rather, what made them so powerful was their ability to organize quickly. We’re talking student leaders getting their peers to sign onto a letter that I could deliver to the Legislature in two to three days. And right up to the final hours before the bill was passed, student leaders were making their voices heard on this issue.

First, we want to make sure both new and existing borrowers understand what resources they have — who they can go to for help, what potential threats they should look out for, and what their options are for fighting back against those threats. Both MASSPIRG and the campus networks will be promoting educational resources to make that happen.

And second: I mentioned earlier that some of the key components of the Borrowers Bill of Rights echo protections and strategies used by the CFPB. Annual reports about problems borrowers are encountering, analyses of trends in the marketplace, lists of servicers who’ve committed infractions — MASSPIRG and our coalition partners will be tracking this data, publicizing it, and advocating for any additional enforcement action or reforms that may be needed.