Student Loans: What Borrowers Need to Know


Privately held student loans

Under the new initiative negotiated by California and other states, students with commercially owned Federal Family Education Loan or privately held student loans who are struggling to make payments due to the COVID-19 pandemic may also be eligible for expanded relief. Such borrowers should immediately contact their student loan servicer to identify options that are appropriate to their circumstances.

Information for Student Loan Borrowers

The Department of Financial Protection and Innovation (DFPI) licenses and regulates student loan servicers who operate in California. Please contact our Consumer Services Office or call 1-866-275-2677 for assistance, questions, or to file a complaint regarding issues with your student loan servicers.

To expedite complaint processing, consumers should first ask their servicer through a Qualified Written Request, or QWR, for specific loan details related to their complaint. (What is Qualified Written Request QWR?) The servicer must respond to a borrower’s QWR within 30 days. If that fails to resolve the issues in dispute, borrowers may submit the QWR response to the DFPI. The U.S. Department of Education prevents servicers from providing individuals’ loan details directly to us.

Student loan borrowers can look up and verify whether loan servicers are licensed through the Nationwide Multistate Licensing System (NMLS) Consumer Access On the NMLS site, borrowers can also find the mailing address, telephone number, email address and website information for their loan servicers.

In addition, the following federal resources also are available:

Consumer Financial Protection Bureau
Consumer Complaints

P. O. Box 4503
Iowa City, IA 52244
Telephone: (855) 411-2372
Fax: (855) 237-2392
U.S. Department of Education
Federal Student Aid (FSA) Ombudsman Program

P.O. Box 1843
Monticello, KY 42633
Phone: (877) 557-2575
Fax: (606) 396-4821


Frequently Asked Questions

Below are answers to some of the most common student loan questions. Additional information is also available in our Student Loan informational brochure (PDF). Please contact our Consumer Services Office or call 1-866-275-2677 for additional assistance or questions regarding issues with your student loan servicer.

What’s covered by California’s law?

Servicing covered by California’s Student Loan Servicing act includes:

  • Activity that originated in California and is directed to California and out-of-state residents (as long as the billing address provided in the loan paperwork shows a California address).
  • Activity that originated outside California but is directed to California residents.

Who should I contact to get information about my loan?

  • If your loan is for the current or upcoming school year, contact your school’s financial aid office directly.
  • If your loan was disbursed in a past school year and you’re still in school, contact your loan servicer.
  • If you are no longer in school, contact your loan servicer.

What if I have a problem with my loan servicer?

The DFPI assists with complaints from student borrowers and enforces violations of the underlying law, the Student Loan Servicing Act. If you are a California resident and are experiencing issues with your loan servicer, contact the DFPI’s Consumer Services Office at 1-866-275-2677 or file a complaint through this link.

What is a Qualified Written Request (QWR)?

A Qualified Written Request, or QWR, is a written correspondence that you or someone acting on your behalf can send to your student loan servicer. 

You can send a QWR to request information about the servicing of your student loan or to assert that the company has made an error. Make sure your QWR explains in detail what information you want, or why you think the account is in error. When you send your servicer a qualified written request, make sure to send it to the correct address. It may be a different address than where you send your payments.

Your servicer must confirm receipt of your request within ten business days and within 30 business days, provide information relating to the request and, if applicable, the action the servicer will take to correct the account or an explanation for the issue you are experiencing.

Important: Your servicer is not allowed to charge a fee for responding to your QWR.

Reference: Assembly Bill No. 38 Chapter 379 (

If a student doesn't qualify for a loan on their own, can someone co-sign to help?

Students may have a cosigner, which is a co-borrower, assist with acquiring a loan. However, the cosigner will be just as responsible for repaying the loan as the student borrower. For those cosigning a loan, it is not uncommon for a student borrower to default (e.g. stop paying) on their loans, so please consider the following:

  • Taking on this responsibility could hurt your relationship if there are disagreements about borrower responsibilities. It is recommended to have a signed agreement between you and the borrower on payment responsibilities.
  • Your credit could be jeopardized.
  • Consider the student borrower’s previous financial decisions and history of keeping a promise.
  • Be prepared to assume the debt if the borrower fails to make their payments.

Federal Student loans vs. Private Student Loans

Whether you obtain a federal student loan, private student loan, or both, you’re obligated to repay the money borrowed, plus interest, regardless if you graduate or not.

Since 2010, federal student loans are made and funded directly by the U.S. Department of Education through the William D. Ford Federal Direct Loan Program. Private loans are funded by banks, credit unions, and other types of lenders. Since private lenders consider various personal factors (including credit score, job history, and school) before approving a loan, you must apply to each individual lender. Additionally, private student loans may not offer the same benefits, flexibility, and repayment terms as federal student loans.

Links to Related Consumer Laws

Assembly Bill 38 (Stone, Chap 379, Stats. 2018)

Assembly Bill 38 (Stone, Chap 379, Stats. 2018)

This bill amends the Student Loan Servicing Act to clarify who is covered under the Student Loan Servicing Act, and to streamline the process for licensing and regulating student loan servicing in California. Among other things, the bill exempts guaranty agencies engaged in default aversion and debt collectors, as defined.

Assembly Bill 461 (Muratsuchi, Chap. 525, Stats. 2017)

Assembly Bill 461 (Muratsuchi, Chap. 525, Stats. 2017)

This new law excludes from gross income, for taxable years 2017 through 2021, student loan debt that is cancelled under income contingent repayment plans for public service and other employees administered by the U.S. Secretary of Education.

Assembly Bill 1178 (Calderon, Chap. 448, Stats. 2017)

Assembly Bill 1178 (Calderon, Chap. 448, Stats. 2017)

This new law requires, commencing with the 2018-19 award year, that each higher education institution, except for the California Community Colleges, to the extent possible, send an individualized letter to their students regarding information on their student loans.

Assembly Bill 2251 (Stone, Chap. 824, Stats. 2016)

Assembly Bill 2251 (Stone, Chap. 824, Stats. 2016)

This bill adds a new Division, the “California Student Loan Servicing Act,” to the Financial Code. The Act requires servicers to adhere to specified borrower protections when servicing student loans. The bill also expands the authority of the Commissioner of the Department of Financial Protection and Innovation to include the licensure, regulation and oversight of student loan servicers. This bill prohibits a person from acting as a student loan servicer without a license, unless exempt.

Assembly Bill 3212 (Irwin, Chap 555, Stats. 2018)

Assembly Bill 3212 (Irwin, Chap 555, Stats. 2018)

This bill expands the service members who are entitled to certain protections in the Military and Veterans Code when on active military duty. The bill also expands the protections available to active service members regarding financial and other obligations including student loans.

Last updated: Sep 29, 2021 @ 11:03 pm