As Federal Protections Falter, Massachusetts Borrowers Protected by State's Student Loan Watchdog

FOR IMMEDIATE RELEASE

As Federal Protections Falter, Massachusetts Borrowers Protected by State's Student Loan Watchdog

Hildreth Institute launches dashboard highlighting vital role of consumer protection amid threats to CFPB

BOSTON – March 13, 2025 – As the federal Consumer Financial Protection Bureau (CFPB) faces an unprecedented threat of shutdown and uncertainty clouds student loan repayment plans nationwide, Massachusetts borrowers continue to benefit from state-level protections established through the Student Loan Borrowers’ Bill of Rights, championed by the Hildreth Institute and its partners. Massachusetts is among a growing number of states—including California, Illinois, the District of Columbia, and New York—that enacted similar legislation during the first Trump administration, establishing dedicated Student Loan Ombudsman offices and assistance units to advocate for borrowers, resolve disputes, and hold loan servicers accountable at the state level.

The federal CFPB, a critical defender against predatory lending practices and financial abuses, has seen its activities drastically reduced amid recent threats to dismantle the agency entirely. Reports from the Senate Banking Committee indicate an alarming 80% drop in CFPB complaint processing, significantly weakening consumer protections at a time when borrowers need them most.

"At a moment when federal protections are weakening, Massachusetts provides a crucial model for safeguarding borrowers from financial harm," said Bahar Akman Imboden, Managing Director of the Hildreth Institute. "Our state-level protections ensure borrowers aren’t left vulnerable amid growing uncertainty."

To highlight the critical role the CFPB plays—and the gap its potential absence leaves behind—the Hildreth Institute, in collaboration with DataKind, has launched a beta version of the Student Borrower Complaints Dashboard. This innovative tool visualizes real-time borrower complaints data from the CFPB, providing policymakers, advocates, and the public with clear insights into systemic loan servicing problems and borrower experiences.

Key dashboard features include:

• Real-time tracking and monthly updates of complaint data.

• Comparative analysis of loan servicers, identifying patterns of misconduct.

• Trend analysis highlighting changes in borrower concerns over time.

• State-level filtering and heat maps illustrating regional challenges faced by borrowers.

Though this dashboard specifically visualizes student loan complaints, it underscores just one aspect of the essential consumer protection services provided by the CFPB. The potential loss of the agency would severely diminish protections against widespread financial exploitation.

The student borrower experience is complex and multifaceted, and the volume of complaints submitted to the CFPB underscores this reality. Borrowers face a wide range of challenges, from loan servicer errors and repayment struggles to misinformation about loan terms. Addressing these complaints on an individual basis is not enough—we must examine the student loan system as a whole to tackle its underlying issues.

Key problems include:

• Servicer Errors and Mismanagement: Misapplied payments, incorrect balances, processing mistakes.

• Repayment and Forgiveness Program Challenges: Poor communication, complex enrollment procedures, and delays or denials for income-driven repayment and loan forgiveness programs.

• Incorrect Credit Reporting: Errors negatively impacting credit scores and financial standing.

• Unfair Fees and Interest Charges: Unexpected or unclear late fees and interest capitalization.

"Without strong federal oversight, borrowers become more susceptible to misinformation and abuses by loan servicers," said Hiba Agha, Director, Strategic Initiatives at the institute. "Our state-level system can serve as a model for other states aiming to protect their residents."

Massachusetts residents experiencing issues with their student loans are encouraged to file complaints directly with the state's Student Loan Ombudsman and Assistance Unit. Borrowers outside Massachusetts can visit this resource page for guidance on complaint filing.

Access the Student Borrower Complaints Dashboard and learn more here.

For media inquiries, please contact: news@hildrethinstitute.org