Written Testimony about the Private Student Loan Market, before the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection

Abstract

In this testimony for a hearing held Sept. 17, 2024 entitled "Back to School: Shedding Light on Risks and Harm in the Private Student Lending and Servicing Market," Professor Jiménez warns that the post-2020 private student-loan sector has expanded beyond traditional bank loans to include tuition payment plans offered by colleges, high-interest “deferred tuition” loans, and income-share agreements marketed by vocational boot camps. She documents deceptive disclosures, excessive fees, transcript withholding, and the targeting of women and minority borrowers. In bankruptcy, some lenders file or settle on debts already discharged and use stipulations that bar future discharge attempts; in state courts, debt-buyer and lender plaintiffs routinely ignore documentation rules yet still win default judgments. Jiménez urges the CFPB to issue 1022(c)(4) orders, build a federal registry of non-bank student-debt firms, mine court-docket microdata nationwide, and pursue enforcement against stale or unlawful claims.  

Keywords: congressional testimony, student debt, student loans, bankruptcy, tuition repayment plans, private student loans