Predatory lenders are a problem for Washington state students, but efforts to create a student loan bill of rights in the state legislature have stalled.
Predatory lenders are a problem for Washington state students, but efforts to create a student loan bill of rights in the state legislature have stalled. zimmytws/Getty Images

According to a new report from the federal Consumer Financial Protection Bureau (CFPB)—the agency created by the Dodd-Frank act in 2010 to safeguard consumers from predatory loan and mortgage sharks—Washington state students have a student loan problem. Complaints filed to the agency from Washington students increased by 732 percent in the last year alone.

The agency acknowledges that some of the increase may be due to an update in their own complaint form accepting complaints about federal loans. Still, Washington state comes in second place nationally for the largest increase overall. Between 2016 and 2017, Washington students filed 1,220 student loan complaints.

More than two-thirds of student loan complaints across the country dealt with private lenders like Navient LLC, which saw an 813 percent increase in average monthly complaint volume over the last year. Most complaints from students pertained to dealing with their lenders, though 33 percent of the complaints described students who were unable to repay their loans.

In January, both the CFPB and Washington State Attorney General Bob Ferguson sued Navient, an offshoot of Sallie Mae, for allegedly unfair and deceptive practices in signing student loans. According to the lawsuit, Navient, while still Sallie Mae, made subprime loans to students attending private colleges with graduation rates lower than 50 percent, and then pushed students into short-term forbearances that punished them with additional interest rather than income-based repayment adjustments. (Navient did not immediately respond to a request for comment.)

In addition, the AG asked the Washington State legislature to create a "student loan bill of rights" to establish standards for student loan services in the state. A house bill to create a student loan bill of rights passed 72-27, but died in the state senate during regular session. The bill was reintroduced during the legislature's special session on April 24, but hasn't progressed from there.

If efforts to protect Washington students from predatory lenders are stalled another year, students may have to rely on their own wits and instincts alone. Luckily, the Washington Attorney General's Office has created a resource for students considering student loans: a student loan survival guide.