Student Loans – Borrower Resources
About the Department of Financial Protection and Innovation
The Department of Financial Protection and Innovation (DFPI) licenses and regulates student loan servicers operating in California. There are several state and federal laws that help protect borrowers. The Student Loan Servicing Act and all subsequent laws have established state standards to ensure consistent, fair, and quality servicing for the more than 4 million Californians who have student loans.
If you need assistance or have questions regarding issues with your student loan servicer, please email our Consumer Services Office at Ask.DFPI@DFPI.ca.gov or call 1-866-275-2677.
How we can help
- We provide information about student borrowers’ rights and responsibilities, and resources to assist borrowers so they can advocate for themselves.
- We ensure that student loan servicers are following the law, and we help protect student borrowers by letting them know their rights.
- You can submit a complaint with the Department about problems you’re experiencing with your student loan servicer, suspicious activity, or scams. All complaints are reviewed on a case-by-case basis.
Before You Seek Help
- Gather your paperwork.
- Identify the kind of loan(s) you have and the servicer(s) for the loan(s).
- Read the Student Loan Bill of Rights to learn about your rights as a borrower.
- Contact your student loan servicer(s) to know your options and to get answers to your specific situation.
- Reach out to DFPI if you have a complaint or if you believe that your rights have been violated.
To expedite complaint processing, consumers should first ask their student loan servicer for specific loan details related to their complaint. Borrowers can do this as a verbal request or as a written request. The servicer must respond to the request within 30 days. If that fails to resolve the issue, borrowers may submit the written request and response to the DFPI. The U.S. Department of Education prevents servicers from providing individuals’ loan details directly to us without authorization. The DFPI will need you to fill out a Third-Party Authorization form for us to correspond on your behalf.
Student borrowers can look up and verify whether loan servicers are licensed through Nationwide Multistate Licensing System (NMLS) Consumer Access www.nmlsconsumeraccess.org. On the NMLS site, borrowers can also find the mailing address, telephone number, email address, and website information for their loan servicers. This kind of verification allows borrowers to determine if a company is a legitimate, licensed company.
In March 2022, the DFPI launched a statewide campaign to inform and educate the nearly four million California student borrowers of their rights, offer support, and share critical resources. Visit the campaign’s landing page to learn more: https://dfpi.ca.gov/studentborrower-resources/.
The DFPI offers a helpful Student Loan brochure (PDF) that summarizes the most important student borrower information and applicable resources.
Student Borrower Bill of Rights
Known as the “Student Borrower Bill of Rights”, Assembly Bill 376 expands the rights of borrowers in several ways. Student loan servicers are now required to provide clear and accurate information, minimize fees, keep accurate records, and must not engage in deceptive or abusive practices. You can find additional information about the Student Borrower Bill of Rights in the Student Loan-Related Laws section below.
Links To Additional Resources
- Consumer Financial Protection Bureau (CFPB) tools:
- National Consumer Law Center: Student Loan Borrower Assistance
The Student Loan Borrower Assistance Project (SLBA) is a program of the National Consumer Law Center (NCLC). The National Consumer Law Center helps consumers, their advocates, and public policymakers use powerful consumer laws to build financial security and assure marketplace justice for vulnerable individuals and families.
- Student Borrower Protection Center
The Student Borrower Protection Center is a nonprofit organization solely focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.
The following federal resources are also available:
|Consumer Financial Protection Bureau
P. O. Box 4503
Iowa City, IA 52244
Telephone: (855) 411-2372
Fax: (855) 237-2392
|U.S. Department of Education
Federal Student Aid Information Center
P.O. Box 1854,
Monticello, KY 42633
Phone: (877) 557-2575
Frequently Asked Questions
Below are answers to some of the most common student borrower questions. Additional information is available in our informational . If you need assistance or have questions regarding issues with your student loan servicer, please email our Consumer Services Office at Ask.DFPI@DFPI.ca.gov or call 1-866-275-2677.
What is covered by California 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 (if 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 online.
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
What is the difference between federal student loans and 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 of 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.
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 (i.e., 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.
Student Loan-Related Laws
- 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 461 (Muratsuchi, Chap. 525, Stats. 2017)
This new law excludes from gross income, for taxable years 2017 through 2021, student loan debt that is canceled 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)
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 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 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.
- Assembly Bill 376 (Stone, Chap 154, Stats 2020)
Known as the “Student Borrower Bill of Rights”, this bill expands borrower rights in the number of ways, including:
- Loan servicers must provide accurate information about your repayment This includes giving information about expanded protections available to borrowers who may qualify for special benefits, such as public servants and people with disabilities.
- Servicers must provide clear answers to your questions. Servicers must give accurate information about their repayment options to avoid defaulting on their loans.
- Servicers and lenders must minimize their fees. Fees are capped at 6% of the outstanding amount.
- Servicers must apply all payments in a way that helps reduce the overall cost of the loan. This helps to minimize any fees or interest charges.
- Servicers must process and post payments in a timely fashion. Overpayments must be posted and processed in the best financial interest of the borrower.
- Servicers must maintain accurate records. Loan servicers must have better records management, process paperwork on time, and diligently oversee their service providers.
- Servicers must not engage in deceptive or abusive practices in connection with loan servicing. A borrower has the right to legal action against their servicer if they fail to comply with these laws. This is called a ‘Private Right of Action’ and allows borrowers to collect damages and restitution.
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.
- Press Release: California Provides Expansion of Student Loan Relief: Most Private Loan Servicers Agree to Help
- List of participating student loan servicers: https://dfpi.ca.gov/contact-information-for-private-student-loan-servicers/
- Frequently Asked Questions – Private Student Loan Relief
It’s important to know your rights and protections as a borrower. Although we focus mainly on providing information to borrowers and advocates, we are here to help if you suspect that you’ve been the victim of fraud or your rights have been violated.
Protect Yourself From Fraud
Scammers often target those that are most vulnerable and can make their situations exponentially more difficult. The best way to protect yourself is to stay informed and never pay for inherently free services, like managing your student loan debt or filling out the Free Application for Federal Student Aid (FAFSA) form.
Know Your Responsibilities
Always keep accurate records of your student loans. Knowing the terms of your loan, the kind of loan you have, and when payments are due are all critical aspects to staying on top of your loan. Also, don’t ignore your loan payments. Communicate with your servicer if you cannot make payments or have questions about your payment options.
Know Your Options
You have the right to temporarily stop payments with a deferment or forbearance, the right to reduced payments by switching repayment plans (in certain situations), and the right to loan cancellation, discharge, or forgiveness (in certain situations).
Expanded protections and assistance are also available to borrowers who may qualify for special benefits, such as public servants and people with disabilities. If you have a federal loan, you can check in with https://studentaid.gov/ to understand what additional options may be available to you. If you have a private loan, reach out directly to your lender to see if you qualify for additional benefits.
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