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State regulations on student loans

What regulations can protect you from servicers and lenders — depending on where you live.

The federal government has laws to protect both federal and private student borrowers. But these regulations don’t cover everything, and some states have passed additional legislation to make sure recipients are fairly treated. But not all states offer protections beyond federal law — and the Department of Education (DoE) sometimes pushes back against state rules.

Does the federal government regulate student loans?

Yes. The federal government has laws regulating both government-issued and private student loans.

General protections

Federal protections like the Truth in Lending Act, Fair Credit Reporting Act and Fair Debt Collections Act protect all types of borrowers, including student loan holders. These work to ensure your lender reasonably represents the loan, and to prevent debt collectors from harassing you.

Student loan protections

The DoE also regulates most aspects of federal student loans — from interest rates to repayments.

The Federal Student Aid (FSA) Ombudsman Group is a branch of the DoE charged with enforcing and resolving any consumer complaints involving federal student loans. And the Consumer Financial Protection Bureau (CFPB) acts in a similar way for both federal and private student loans.

However, regulation specifically for student loans doesn’t cover everything. For this reason, several states have additional legislation.

States with student loan regulations

Currently, only 14 states and Washington DC have or are considering student loan regulations in addition to federal laws. Several states recently passed student loan regulations that might only be temporary since the DoE argues it’s the federal government’s responsibility to handle student loans.

The majority of these laws focus on protecting consumers from student loan servicers, with some even establishing regulatory bodies like state ombudsman offices where consumers can file complaints. Others offer state tax credits or deductions for student borrowers in addition to the federal student loan interest tax deduction.

Here are the regulations that affect you — or might affect you soon — as of February 2019.

How a student loan ombudsman can help resolve issues with your servicer

StateLaws in placeLearn more
  • Student Loan Servicing Act
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  • Student Loan Repayment Acceleration Act — currently a bill
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  • Student Loan Bill of Rights
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  • Student Loan Servicing Rights Act
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  • Maine Revised Statutes, Title 36, §5217-D: Credit for Educational Opportunity
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  • Maryland Tax-General Code § 10-740, Student Loan Debt Relief Tax Credit
  • Maryland Financial Consumer Protection Act
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Read more

  • Student Loan Bill of Rights
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  • Minnesota Statutes, Section 290.0682, Student Loan Credit
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New Jersey
  • NJ A1670
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New Mexico
  • Student Loan Bill of Rights Act — currently a bill
Read more
New York
  • Student Loan Bill of Rights — currently a bill
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Rhode Island
  • Rhode Island Higher Education Assistance Act
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  • Code of Virginia § 23.1-231 — 23.1-234, Office of the Qualified Education Loan Ombudsman
Read more
  • Student Loan Bill of Rights
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Washington, DC
  • Student Loan Ombudsman Establishment and Servicing Regulation Amendment Act
Read more

What can I do if I think my rights were violated?

If you think your servicer or lender has broken any of the federal or state laws, there are several steps you can take:

  1. Contact customer service. Reach out and explain your situation to the company first. It’s often easier to resolve the issue with your lender or servicer directly than going through a third-party agency.
  2. File a complaint. You can file a complaint against federal loan servicers with the FSA Ombudsman Group or your state’s student loan ombudsman. Private student loan holders can complain to the CFPB, Federal Trade Commission or your state’s attorney general’s office. They can mediate the dispute between you and the company.
  3. Hire a lawyer. When regulatory bodies aren’t able to protect you, you might want to consider hiring a lawyer to contact your lender or servicer, or file a lawsuit.

4 student loan scams to watch out for

Bottom line

Only a handful of states have protections for borrowers, and most focus on repayments. Federal law still generally has the biggest impact on most American student loan holders. Learn more with our article on federal student loan legislation. Or explore your student loan options with our comprehensive guide.

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