Attorney General Bonta Advocates for Expansion of Federal Student Loan Relief

Borrowers should not be held responsible for student loan servicers’ misconduct or oversight failures

OAKLAND — California Attorney General Rob Bonta today joined a multistate coalition of 19 attorneys general in sending a letter to the U.S. Department of Education (ED) supporting ED’s proposed regulations that would expand debt relief to more federal student loan borrowers. U.S. borrowers currently hold over $1.7 trillion in federal student loan debt; 3.8 million Californians owe over $142 billion of this debt.

“For many students, especially low-income students and students of color, college is only possible because of student loans. Most students have no choice but to go into significant debt to afford higher education,” said Attorney General Bonta. “Policy failures and misconduct by student loan servicers have left many borrowers in the dark, unable to navigate complicated and burdensome loan repayment and forgiveness programs. The path to relief is for many, a new barrier to jump though instead of a quick and simple step. These new regulations will expand relief to more borrowers, I urge the Department of Education to very quickly apply relief.”

In the letter, the attorneys general support the proposed federal policy, which would waive repayment for borrowers who have seen their debt balloon beyond the amounts they originally owed, borrowers who have been struggling under the burden of student loan debt for decades, and borrowers who attended schools that failed to provide sufficient value to their students. The proposed regulations also would waive remaining loan balances for borrowers who meet the eligibility criteria for loan forgiveness under existing programs but have not achieved forgiveness because they have not successfully enrolled in or applied to these programs.  

The letter continues by urging ED to implement the relief quickly to help alleviate borrowers of the financial and psychological burdens associated with long-term student loan debt. Attorneys general have long been on the front lines of the student debt crisis, fighting on behalf of student loan borrowers who have been struggling for years due to the undeniable shortcomings of the student loan system; shortcomings which are disproportionately borne by low-income borrowers and borrowers of color. One study found that, 20 years after starting college, the average Black student loan borrower still owes 95% of their original balance, while the average white borrower owes only 6%. Due to racial wealth disparities, most Black and Latino college students come from low-income backgrounds and can count on only a fraction of the financial support as their white counterparts. More debt and less support have undeniably led to long-term debt burden and severe financial consequences. According to the California Department of Financial Protection and Innovation, although more students of color are attending college, student debt has delayed them from purchasing homes, starting businesses, and building generational wealth. 

In sending today’s letter, Attorney General Bonta joins the attorneys general of Massachusetts, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia.

Attorney General Bonta has been active in in protecting and obtaining meaningful relief for student loan borrowers.

• In September 2023, Attorney General Bonta submitted a letter to the Biden-Harris Administration raising concerns about the resuming of federal student loan payments and asking for robust measures to protect borrowers.
• In January 2023, Attorney General Bonta, along with 21 other state attorneys general, filed an amicus brief in the U.S. Supreme Court in support of the Biden Administration’s plan to discharge between $10,000 and $20,000 in federal student loan debt for certain lower-income borrowers. 
• In January 2022, Attorney General Bonta announced a multistate settlement against Navient, one of the largest student loan servicers in the country, to resolve allegations of misconduct in the servicing and collection of federal student loans. The settlement includes $95 million in nationwide restitution for federal student loan borrowers and additional private student loan debt cancellation. Attorney General Bonta called on the U.S. Department of Education to address the $1.7 trillion student loan crisis and longstanding failures in federal student loan servicing.

A copy of the letter can be found here.