Do you have student loans? California has special protections for you – NBC 7 San Diego


It’s called a new era for students, with unique protections for the nearly 4 million school loan borrowers in California. It is through the California Student Borrower Bill of Rights, which helps with federal and private loans.

“What it did was add an extra layer of protection that was missing at the federal level,” said Celina Damian, ombudsman for student loan services at the Department of Financial Protection and Innovation.

This added layer has created new standards for student loan servicers, ensuring everything they do is in the best interest of the borrowers.

The law took effect in 2021 and requires student loan servicers to provide simple and accurate information, minimize fees, track backgrounds, and not use deceptive practices.

DFPI says Californian with federal or private student loans has the following rights:

  • Loan servicers should provide borrowers with accurate information about loan terms, repayment options, and benefits.
  • Loan servicers need to process and post loan payments in a timely manner.
  • Loan servicers must allocate any overpayments in a manner that is in a student borrower’s best financial interest.
  • Loan officers should minimize late fees – not to exceed 6% of any overdue amount.
  • Loan servicers must process documents in a timely manner.
  • Loan servicers must respond to a borrower’s qualified written request (QWR) within 30 business days.
  • If a student loan is transferred, the original loan servicer must notify the borrower of these changes at least 15 days before any payment is due.
  • Special protections are established for military borrowers, borrowers working in the public service, elderly borrowers and disabled borrowers.
  • If a loan officer fails to comply with the above conditions, a borrower can take legal action against them. This is called a “private right of action”.

The department also works to answer the questions linked to President Biden’s recent loan forgiveness program. Damian said not all details have been worked out.

“We are waiting to see what comes out of the Ministry of Education pipeline,” Damian said. “We work closely with them.”

In the meantime, the DFPI said you should gather all your loan information so you can prepare.

“Find out who your service provider is,” Damian said. “Make sure all your information is up to date with the Department of Education.”

If you have student loans, watch out for scams that start popping up.

“They know it’s happening and they’re trying to take advantage of it,” Damian said. “They even contacted me on my phone and I don’t have a student loan.”


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