May 2, 2019


Senator James Welch, Chairman

Representative James Murphy, Chairman

Senator Michael Moore, Vice Chairman

Representative Christine Barber, Vice-Chairwoman

Members of the Joint Committee on Financial Services


Fr: Deirdre Cummings, MASSPIRG Legislative Director, 617-292-4800

Testimony in Support of H.998, An Act Establishing a Student Loan Bill of Rights


MASSPIRG along with our sister organization Massachusetts Student PIRG urge you to support H.998, An Act Establishing a Student Loan Bill of Rights, filed by Representative Natalie Higgins.  This bill protects student loan borrowers from unfair, predatory, and deceptive practices of student lending and loan servicing companies. There is a similar bill, S.160 filed by Senator Eric Lesser, which was sent to the Consumer Protection Committee.

MASSPIRG is one of the state’s leading consumer advocacy organizations working to protecting consumers for 45 years. We are a non-profit, not partisan member supported organization working with USPIRG our national affiliate and Massachusetts Student PIRG who has 12 college chapters at schools from the Berkshires to the South Shore.  

The cost of college tuition has skyrocketed and ever-increasing numbers of students and their families are driven to seek student loans to pay for it. Data collected by the Institute for College Access and Success shows that in Massachusetts last year, nearly two-thirds of students in an undergraduate program graduated with student debt. This debt amounted to $32,000 thousand dollars per student on average. Consequently, Massachusetts students have the 7th highest average student debt in the nation, according to the Institute. The level of debt is also skyrocketing, according to the Student Borrower Protection Center, student debt in Massachusetts has shot up 107% in the 10 years between 2007 and 2017.  In Massachusetts we have 855,500 student loan borrowers with a collective $33 billion in outstanding debt. Nationally, there is $1.5 trillion in outstanding student loan debt.

Some student loan servicers take advantage of student borrowers by using predatory lending methods that are illegal or unfair, charging exorbitant fees, misrepresenting their products to students, botching paper work, failing to properly process paper work or misleading them into opting for more expensive options.  Further, servicers often fail to inform or properly administer income- based repayment options or programs to relieve debt in exchange for working on public service – a program borrowers are legally entitled to. When students can’t pay, they may threaten, coerce or harass the borrowers. 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.

Despite this massive industry, the history of complaints, the massive size of both the debt and number of borrowers – we have very little consumer protections in place. In fact, under the current Federal Administration, the Consumer Financial Protection Bureau has significantly reduced their oversight and role in this area, leaving borrowers vulnerable and without necessary protection from the unfair practices by the loan servicers exposed by the CFPB.  

H.998 will protect student borrowers by requiring the Division of Banks to license all student loan servicers, holding them accountable for deceptive practices under state law. The bill establishes a Student Loan Ombudsman office who will receive, review, and assist in resolving complaints. This office will be critical in spotting and evaluating unfair and deceptive trends and practices enabling regulators to end the practice and to protect borrowers.  The bill also allows the Division of Banks to conduct investigations and examinations of practices.  

Similar bills have been passed in CT, IL, CA, WA, NY, and Washington D.C., and Colorado’s bill passed the legislature and is awaiting final approval from the Governor.

Now more than ever, it is critical that we defend our students from unscrupulous loan servicers.  The need for state oversight could not be more urgent. Please support H.998.






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