How States Can Help Students Harmed by Higher Education Fraud
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How States Can Help Students Harmed by
Higher Education Fraud
This National Consumer Law Center report surveys states’ Student Protection Funds (SPFs) and
provides a roadmap for how and why all states through the creation or strengthening of SPFs can
provide relief to help students recover financial losses caused by school fraud or sudden closure.
Report
Summary
Appendix A: States with Student Protection Funds (SPFs)
Appendix B: Distance Education and SPF Eligibility
Appendix C: Checklist to Evaluate a State Student SPF
Map: Which Jurisdictions Have SPFs?
Press release
Related Materials
Wake Up Call to State Governments: Protect Online Education Students from For-Profit School
Fraud, Dec. 2015
Ensuring Educational Integrity: 10 Steps to Improve State Oversight of For-Profit Schools, Jun.
2014
Student Loan Law
Published January 14, 2021
©National Consumer Law Center, Inc.
Overview
When a college education is cut short by a school closure or a school engages in fraud, the students
and their families suffer long-term financial distress. Higher education fraud, when unaddressed,
devastates families and their communities, disproportionately impacting low-income, people of color,
and women, who start out economically disadvantaged.
In recent years, several large for-profit school chains, including Corinthian Colleges, ITT Tech, The
Art Institutes, and Education Corporation of America, deceived hundreds of thousands of students
into taking on enormous debts for worthless educations, and then suddenly closed, leaving financial
ruin and trauma for students who attended the schools. Now, as for-profit distance education
increases, students who enroll in out-of-state distance education programs are particularly likely to
be left in the lurch.
Currently, only 20 states have SPFs and most fail to provide adequate relief to harmed students and
many of those should be strengthened to adequately protect student borrowers.
Key Recommendations
The report describes specific ways states can amend their laws to strengthen or create SPFs. The
ideal SPF would do all of the following:
Maintain sufficient funds to pay all student claims and administrative costs;
Require each school to fund a surety bond sufficient to reimburse the SPF for losses caused by
that school;
Be maintained as one single fund that covers all for-profit schools, including degree-granting
schools and out-of-state schools offering distance education programs, as well as sham private
nonprofit schools that financially benefit their board members or owners;
Provide relief to parents and other people who financially contribute to a student’s education;
Establish a SPF claims limitations period, if any, that does not expire as long as any student
debt holder can seek repayment from the student;
Fully reimburse claimants for their total economic loss, including for all loans, grants, and
cash obtained by them or on their behalf to allow them to enroll in a higher education
program;
Provide relief based on group claims submitted by law enforcement agencies; and
Timely resolve SPF applications.
In addition, state agencies should:
Facilitate widespread student access to SPF relief through an easily accessible claims process;
and
Provide periodic public data regarding SPFs to state legislatures and governors.
Additional Resources
Learn more about NCLC’s policy work on student loans
NCLC’s Student Loan Borrower Assistance Project provides information about student loan
rights and responsibilities for borrowers and advocates.
Sign up for NCLC’s Student Loan blog.
Related Publications
For consumers: Surviving Debt (personal finance book) and Consumer Debt Advice (free
articles)
For attorneys: Student Loan Law
Final Debt Collection Rule: Part 2
January 7, 2021
The Consumer Financial Protection Bureau finalized part two of its debt collection rules on
December 18th. This webinar summarizes those rules.
Speakers:
Andrea Bopp Stark, Staff Attorney at the National Consumer Law Center
April Kuehnoff, Staff Attorney at the National Consumer Law Center
116th Congress (2019-20) – Archive
Access to Justice
S. 3913 (Cortez-Masto)/H.R. 7171 (Horsford) End Double Taxation of Successful Consumer
Claims Act. Senate Support Letter. House Support Letter.
S. 2627 (Cortez-Masto) End Double Taxation of Successful Civil Claims Act. Support.
S. 610 (Sen. Blumenthal)/H.R. 1423 (Rep. Johnson), Forced Arbitration Injustice Repeal (FAIR)
Act. Consumer support letter on House and Senate bills.
S. 630 (Sen. Brown) Arbitration Fairness for Consumers Act. Support.
S. 608 (Sen. Durbin) Court Legal Access and Student Support (CLASS) Act. Support.
Auto Sales and Financing
S. 1971 (Blumenthal) Used Car Safety Recall Repair Act. Support.
Bankruptcy Relief
Consumer Bankruptcy Reform Act of 2020 (Warren, Nadler). Support letter.
S. 1414 (Sen. Durbin) Student Borrower Bankruptcy Relief Act of 2019. Support.
H.R. 2648 (Rep. Nadler) Student Borrower Bankruptcy Relief Act, H.R. 2648. Support.
Consumer Financial Protection
(Sen. Harris) Accountability for Wall Street Executives Act of 2019. Support.
H.R. 1500 (Rep. Waters) Consumer First Act. Support letter.Coronavirus Relief
H.R. 8003 (Evans, Clay), Helping HOMES Act of 2020. Support.
H.R. 6800 (Lowey), Health and Economic Recovery Omnibus Emergency Solutions (HEROES)
Act. Support.
S. 3565 (Brown), Small Business and Consumer Debt Collection Emergency Relief Act of 2020.
Support.
Credit Reporting
Credit reporting provisions of the HEROES Act/S.3508. Support Letter.
H.R.5332 Protecting Your Credit Score Act. (Gottheimer). Support Letter
S. 1581/HR 6470 (Merkley, Porter) Medical Debt Relief Act of 2019. Support Letter.
S. 3508 (Schatz, Brown), Disaster Protection For Workers’ Credit Act. Support.
HR 3621 (Rep. Waters) Comprehensive Credit Reporting Enhancement, Disclosure,
Innovation, and Transparency Act of 2020. Support letter.
HR 3614 Restricting Use of Credit Checks for Employment Decisions Act. Support.
HR 3618 Free Credit Scores for Consumers Act. Support.
HR 3622 Restoring Unfairly Impaired Credit and Protecting Consumers Act. Support.
HR 3642 Improving Credit Reporting for All Consumers Act. Support.
HR 3629 Clarity in Credit Score Formation Act. Support.
HR 3621 Student Borrower Credit Improvement Act. Support.
S. 2685 (Senators Reed and Van Hollen) Consumer Credit Control Act. Support letter.
Accurate Access to Credit Information Act of 2019. Support letter.
S. 1336 (Senators Warren and Warner) Data Breach Prevention and Compensation Act.
Support.
S. 3508 (Senators Schatz and Brown) The Disaster Protection for Workers’ Credit Act.
Support.
Criminal Justice
S. 4186, Driving for Opportunity Act of 2020, Support Letter.
MA H 4652, An Act Regarding Decarceration and COVID-19, Support Testimony.
H.R. 6389 (Rep. Rush). Martha Wright Prison Phone Justice Act. Support.
H.R. 6061 (Rep. Nadler). The State Justice Improvement Act. Support.
H.R. 3948 (Rep. Meeks). Debt Collection Practices Harmonization Act of 2019. Support.
S. 1764 (Sens. Duckworth, Portman, Schatz, Booker, King, Markey). Martha Wright-Reed Just
and Reasonable Communications Act of 2019. Support letter.
Debt Collection
S.4697 (Murphy, Van Hollen) Strengthening Consumer Protections and Medical Debt
Transparency Act. Support.
S. 4350 (Van Hollen, Murphy) COVID-19 Medical Debt Collection Relief Act. Support.
MA H. 4694/S. 2734, Debt Collection Fairness Act. House Support Letter. Senate Support
Letter. Group Support Letter.
S. 3841 (Grassley) protecting stimulus payments from garnishment. Joint consumer-bank
support letter.
Conn. H.B. 5427, An Act Concerning Issues Relating to Debt Collection §§ 1, 2 and 3. Support
testimony.
H.R. 5934 (Rep. Bonamici) Securing Consumers against Misrepresented Debt Act of 2020.
Support.H.R. 5330 (Rep. Tlaib), Consumer Protection for Medical Debt Collections Act. Support letter.
H.R. 4403 (Rep. Cleaver), the Stop Debt Collection Abuse Act. Support.
H.R. 5001 (Rep. Clay), Non-Judicial Foreclosure Debt Collection Clarification Act. Support.
H.R.5003 (Rep. Dean), Fair Debt Collection Practices for Servicemembers Act. Support.
H.R. 5021 (Rep. Pressley), Ending Debt Collection Harassment Act of 2019. Support.
H.R. 3948 (Rep. Meeks). Debt Collection Practices Harmonization Act of 2019. Support.
Earned Income Tax Credit
H.R. 3157 (Rep. Kildee), S. 1138 (Sen. Brown) Working Family Tax Relief Act. Support letter to
Senate and House.
Electronic Communications
S. 4159 (Thune), E-Sign Modernization Act. Oppose.
Fair Lending
H.R. 149 (Green), Housing Fairness Act. Support.
H.R. 2324 (Rep. Garcia) /S. 1205 (Sen. Gillibrand), Protections in Consumer Lending Act.
Support.
Housing
H.R. 6729 (Rep. Scott)/ S. 3620 (Senator Reed), COVID-19 Homeowner Assistance Fund Act of
2020. Support.
H.R. 8003 (Evans, Clay), Helping HOMES Act of 2020. Support.
H.R. 6794 (Rep. Vargas), Promoting Access to Credit for Homebuyers Act of 2020. Support.
H.R. 6835 (Rep. Porter), to require residential mortgage servicers receiving certain emergency
relief under the CARES Act to provide reports on loan-level data. Support.
H.R. 7386 (Finkenauer) Helping Owners Meet Essential Standards (HOMES) Act of 2020.
Support.
S. 3509 (Brown) To Protect American Families Facing Financial Hardship or Foreclosure Due
to a Declared Disaster, Including Covid-19. Support.
H.R. 5001 (Rep. Clay), Non-Judicial Foreclosure Debt Collection Clarification Act. Support.
H.R. 5931 (Rep. Clay), Improving FHA Support for Small Dollar Mortgages Act of 2020.
Support.
H.R. 2445 (Rep. Emmer and Foster), Self-Employed Mortgage Access Act of 2019. Support.
H.R. 4783 (Reps. Green, Chu, Garcia and Clay), LEP Data Acquisition in Mortgage Lending Act
of 2019. Support.
H.R. 3141 (Rep. Phillips) FHA Loan Affordability Act of 2019. Support.
S. 2279 (Sen. Cortez Masto)/H.R. 3958 (Rep. Waters), FHA Foreclosure Prevention Act.
Support.
S. 571 (Sen. Merkley) Residential Rent to Own Protection Act. Support.
S. 787 (Sen. Warren) American Housing and Economic Mobility Act of 2019. Support letter.
S. 331 (Sen. Cortez Masto)/H.R. 936 (Rep. Velasquez), Home Loan Quality Transparency Act.
Support.
S. 3508 (Schatz, Brown), Disaster Protection For Workers’ Credit Act. Support.
Overdraft Fees
S. 1595 (Booker), Stop Overdraft Profiteering Act of 2019. Support.
H.R. 4254 (Rep. Maloney), Overdraft Protection Act of 2019. Support.Payday Loans
H.R. 5050 and S. 2833 (Rep. J. Garcia and Sen. Merkley), Veterans and Consumers Fair Credit
Act. Support.
Calif. SB 472. NCLC opposition letter.
Indiana SB 613. NCLC & CRL analysis.
Payments
H.R. 2650 (Payne)/S. 4145 (Menendez), Payment Choice Act. Group Support Letter. Press
Release.
Privacy and Data Breaches
Coalition letter urging Congress to prioritize civil rights in upcoming privacy legislation, Feb.
13, 2019
Student Loans
H.R. (Pressley, Omar), Student Debt Emergency Relief Act. Support.
H.R. 5114, the Stop EITC and CTC Seizures Act, led by Rep. Sylvia Garcia (D-TX).
H.R. 2991, the Protection of Social Security Benefits Restoration Act, led by Rep. Raul Grijalva
(D-AZ).
H.R. 3764 – Justice for Student Borrowers Act (Scanlon). Support.
HR 3621 Student Borrower Credit Improvement Act. Support.
H.R. 5241 (Krishnamoorthi), Protecting Students from Worthless Degrees Act. Support.
H.R. 3512 and S. 867 (Rep. Lee and Sen. Durbin) Borrower Defense Congressional Review Act
repeal. Support letter.
H.R. 2486 and S.1279 (Rep. Adams and Sen. Jones)- FUTURE Act. Support letter to Senate.
S. 1153 (Senators Baldwin, Braun, Shaheen and Fischer) Stop Student Debt Relief Scams Act
of 2019. Support.
NCLC 2021 Federal Priorities
2021 Consumer Protection Federal Priorities
2021 Consumer Protection Priorities for a Covid Stimulus Package
Banking
2021 Banking Agency Predatory Lending and Safe Banking Priorities
Credit Reporting
2021 Credit & Consumer Reporting Priorities to Promote Economic RecoveryDebt Collection
The CFPB Must Issue Emergency Guidance on Debt Collection during the Pandemic
How Congress and the CFPB Can Protect Americans from Abusive Debt Collection
Medical Debt
COVID-19 Medical Debt: First 100 Day Priorities for the Biden Administration
Housing
NCLC Foreclosure Prevention & Mortgage Lending Priorities
Priorities for CFPB
Priorities for HUD, FHFA, & USDA
Robocalls
How Congress and the FCC Can Protect Americans from Invasive and Dangerous Robocalls
and Robotexts
Student Loans
2021 Federal Priorities for the Student Debt Crisis
Utilities and Communications
Energy, Water, and Communications Priorities for COVID Relief & Biden’s First 100 Days
Final Debt Collection Rule: Part 1
November 6, 2020
The Consumer Financial Protection Bureau finalized part one of its debt collection rules on October
30th. This webinar summarizes those rules.
Speakers:
Andrea Bopp Stark, Staff Attorney at the National Consumer Law Center
April Kuehnoff, Staff Attorney at the National Consumer Law CenterSamuel R. Shepard, N. Neal Pike Fellow
Sam Shepard is the N. Neal Pike Fellow at NCLC working to develop
resources that help Americans with physical, intellectual, developmental, or other disabilities use
consumer law protections to seek justice. In 2019, Sam was a Hobbs Fellow at NCLC. Previously, he
worked as a judicial intern for Judge Ojetta Rogeriee Thompson on the First Circuit Court of
Appeals. He received his B.A. from Brown University and graduated cum laude from Boston
University School of Law.
Help 9 Million People Get Their Stimulus
PaymentSpread the Word! Deadlines
Approaching for Unclaimed Stimulus
Payments
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided economic impact
payments to individuals up to $1,200 and $500 for each qualified child to help dampen the impact of
the economic fallout of COVID-19. Most people have already received their payments.
But about 9 million people who make so little they do not file taxes have not claimed their
payment, and they have a November 21 deadline to do so in order to receive the payment in 2020.
This group includes very low-income families with children, people disconnected from work
opportunities for a long period, many low-income adult-only households, and low-income individuals
who receive Social Security or Supplemental Security Income. A simple IRS form they may not know
about now stands between them and their much-needed stimulus funds.
Help spread the word about the November 21, 2020 deadline for non-filers to
complete the IRS form to receive their full Economic Impact Payment.
The Center on Budget and Policy Priorities (CBPP) estimates there are 9 million people who are
eligible for Economic Impact Payments (EIP) but must file an online form with the IRS by November
21 to claim the funds this year. Otherwise, they must file a 2020 tax return next year to receive the
payment in 2021. The CBPP report provides demographic information, state by state numbers,
and suggestions for steps that states, as well as community and legal service providers, can take to
help the most vulnerable individuals claim the substantial economic stimulus payment.
The best way to claim the payment is to use the Non-Filers: Enter Payment Info Here link on the IRS
website. But it is also possible to print and mail the information. Instructions on how to do so are on
the IRS Economic Impact Payment Information Center in the answers to the questions. “Can I
print information to register me for the Payment if I use the Non-Filers: Enter Payment Info Here
tool?” and “May I mail Form 1040 or Form 1040-SR with information Necessary for my Payment
instead of using the Non-Filers: Enter Payment Info Here tool?”
Resources
Questions about stimulus payments are on the IRS website in the Economic Impact Payment
Information Center and for those on Social Security or retired railroad workers and veterans.
CBPP has resources to support EIP outreach work, including flyers, press release templates, FAQs,
and additional outreach tools. Please also spread the word that people who received an EIP prepaid
card should activate it or replace it to receive their money.
And save the date: Nov. 10 is the National EIP Registration Day to help reach more non-filers.
More information
Center for Budget and Policy Priorities: Aggressive State Outreach Can Help Reach the12 Million Non-Filers Eligible for Stimulus Payment
Center for Budget and Policy Priorities: Stimulus Payments Outreach Resources
NCLC: IRS Sending Letters About Unactivated Stimulus Prepaid Cards
NCLC: The EIP Stimulus Payment Prepaid Card: Not a Scam; How to Avoid Fees
(sample card and mailer)
NCLC’s COVID-19 website (continually updated) has extensive information on responses to
the crisis, including state-by-state information on orders that have been issued
Litigating Bail Cases: Using Consumer Laws
to Challenge Commercial Bail Industry
Practices
July 23, 2020
Lawsuits across the country are challenging commercial bail systems. This webinar will discuss how
consumer laws may be used to challenge abusive and unfair bail industry practices, as well as
litigation strategies and obstacles.
Speakers:
Alex Kornya, Iowa Legal Aid
Ivy Wang, Southern Poverty Law Center
Ariel Nelson, Staff Attorney at the National Consumer Law Center
Urge the Senate to Pass Another Stimulus
Package!Urge your U.S. Senators to
help families and the
economy recover from
COVID-19 by passing the
HEROES Act
The coronavirus crisis is continuing, and the economic crisis is devastating families. With close to 50
million people unemployed, many more with reduced hours, and full economic recovery nowhere in
sight, we need another stimulus package to help the economy recover and to prevent debt loads
from destroying families for years to come.
The U.S. House of Representatives has passed the HEROES Act and now the
Senate must do the same!
The HEROES Act is a $3 trillion dollar package in response to the COVID-19 crisis. In the consumer
area, the bill provides desperately needed help for families dealing with the economic crisis, beyond
the modest start in the previous CARES Act. The HEROES Act:
Provides immensely needed funds to help families cover necessities through increased
stimulus payments, extended unemployment benefits, and, for the poorest families, increased
support for food, rent, home energy, water, and basic broadband service.
Expands recently passed debt forbearance relief to most mortgages, federal and private
student loans, and rent.
Stops debt collection activities that endanger stimulus payments, wages, bank accounts,
homes, utilities, and cars.
Creates a path to recovery by halting negative credit reporting and by requiring creditors to
offer affordable repayment options.
Please email or call your U.S. Senators and tell them we need another
stimulus package to help the economy and families to recover, and ask them
to support the HEROES Act. Find contact information here.
Other Actions You Can Take
Write a letter to the editor of your local paper. Here’s how.
Tweet to your senators to pass the HEROES Act using #HEROESAct and #COVID19.
LEARN MORE about NCLC’s work on COVID-19 & Consumer Protections.
COVID-19 & Consumer Protections
Major Consumer Protections Announced in Response to COVID-19Protecting Against Creditor Seizure of Stimulus Checks
Mortgage Relief for Homeowners Affected by COVID-19
Surviving Debt: Expert Advice For Getting Out of Financial Trouble (free access to the digital
edition during the COVID-19 crisis via this link). Print books may be ordered at NCLC’s Digital
Library bookstore.
An Introduction to CARES Post-Forbearance
Options
May 28, 2020
This session will provide an introduction to post-forbearance options for borrowers obtaining
mortgage relief under the CARES Act. The program will review options available through FHA and
the GSEs based on the most recent guidance and information available.
Speakers:
Andrea Bopp Stark, Attorney at the National Consumer Law Center
Tara Twomey, Of Counsel to the National Consumer Law Center
Geoff Walsh, Attorney at the National Consumer Law Center
*Webinar starts 25 minutes into the recording
Additional Material: Covid-19 Mortgage ChartYou can also read
