T he United States has created vast federal loan programs offering to millions of students alternatives to private educational loans . According to the U.S. Department of Education's (ED's) Office of Federal Student Aid (FSA), nearly 43 million borrowers owed money on federal student loans as of the second quarter of 2019, and the total amount of outstanding federal student loan debt currently exceeds $1.4 trillionâa figure that has nearly tripled since 2007. In recent years, a significant number of these borrowers have experienced difficulty repaying their student loans. Moreover, borrowers who lack financial experience may need guidance to navigate the student loan repayment process, which some borrowers find daunting or confusing. Student loan servicers âwith whom the United States has contracted to assist with the administration of its sizable student loan portfolio âare a key source of guidance and assistance for borrowers struggling to understand and repay their federal student loans. Under its contract with the federal government, a servicer may be responsible for (among other things) communicating with borrowers regarding repayment; disclosing information about student loan terms to borrowers; applying payments to outstanding loan balances; processing applications for enrollment in repayment plans; processing applications for loan forgiveness or discharge; and processing requests for loan forbearance or deferment. Some maintain that at least some of these federal student loan servicers have engaged in various forms of undesirable conduct, such as steering borrowers away from beneficial repayment options or providing inaccurate or incomplete information. Representatives from the servicing industry deny these accusations. These allegations of servicer misconduct have drawn the attention of both federal and state policymakers. At least two congressional subcommittees have conducted hearings on student loan servicing within the past few months , and the House Committee on Financial Services conducted another hearing on the topic on September 10, 2019. Additionally, several state legislatures have enacted new laws to regulate student loan servicers within the past few years. A number of state attorneys general and individual borrowers have also tried to pursue civil litigation against servicers of federal student loans based on alleged violations of state statutory and common law. The states' involvement has raised questions involving the appropriate interaction between federal and state law, as well as the respective roles of the federal and state governments with respect to regulating student loan servicers. Significantly, ED has taken the position that the existing regime of federal regulation of student loan servicers leaves no room for state regulation on the topic. While some courts have agreed with this position, others have concluded that current federal law permits the state to regulate servicers with whom the federal government contracts. This report analyzes the regulation of servicers of federal student loans. After providing necessary background information regarding the federal student loan programs, the report describes federal law governing student loan servicers. The report then discusses how some states and borrowers have tried to enact or enforce state laws to regulate servicers of federal student loans. Then, the report analyzes the legal issues implicated by the interaction of federal and state servicing laws, including whether (and, if so, to what extent) federal servicing regulation preempts the states from creating or enforcing servicing laws of their own. The report concludes by identifying relevant legal considerations for Congress. Background on the Federal Student Loan Programs The federal government's roles with respect to the operation, supervision, and administration of federal student loan programs have evolved over time. Around the turn of the millennium, for instance, most (though not all) federal student loans were issued under the now-discontinued Federal Family Education Loan Program (FFELP), under which private lenders extended loans to borrowers that the federal government guaranteed against the risk of loss. Although the federal government set the terms and conditions of FFELP loans and subsidized the FFELP program, various entities other than the federal government also helped operate the FFELP. For example, private lenders (or third parties with which those lenders contracted) bore the responsibility of servicing FFELP loans. Several recent developments, however, have shifted the federal government's role in the student loan system. In 2008, for instance, Congress enacted the Ensuring Continued Access to Student Loan Act (ECASLA), which authorized ED to purchase outstanding FFELP loans from private lenders. Thus, for the nearly 4 million loans that ED purchased from private lenders under ECASLA, "the federal government is now the 'lender.'" Then, in 2010, Congress enacted the Student Aid and Fiscal Responsibility Act (SAFRA), which, among other things, terminated the authority to make new FFELP loans. As a result of SAFRA, the United States now issues most new federal student loans through the Federal Direct Loan Program (FDLP), under which the government itselfârather than a private lenderâextends loans directly to students. These developments have thereby expanded the federal government's direct involvement in the student loan industry, which in turn has prompted the United States to rely increasingly on servicers to administer aspects of the federal student loan programs. Federal Laws and Contractual Requirements Governing Student Loan Servicers A variety of federal statutes and regulationsâas well as contractual provisionsâbear on the servicing of federal student loans. Statutory Provisions One such statute is Title IV of the Higher Education Act of 1965 (HEA), which (among other things) establishes programs to provide financial assistance to postsecondary students, including the FDLP. Title IV also governs loans issued under the now-discontinued FFELP that remain outstanding. Title IV contains several provisions that pertain to student loan servicing. The first such provision is 20 U.S.C. Â§ 1082, which applies to FFELP loans. 20 U.S.C. Â§ 1082(a)(1), for instance, empowers the Secretary of Education (Secretary) to "prescribe . . . regulations applicable to third party servicers," "including regulations concerning financial responsibility standards for, and the assessment of liabilities for program violations against, such servicers." Section 1082(a)(1) explicitly specifies, however, that "in no case shall damages be assessed against the United States for the actions or inactions of such servicers." Section 1082( l )(1) in turn requires the Secretary to promulgate regulations "prescrib[ing] standardized forms and procedures regarding .Â .Â . [student loan] servicing." In addition, Section 1082(p) requires certain officers, directors, employees, and consultants of student loan servicing agencies to submit reports to the Secretary disclosing potential financial conflicts of interest. Another provision, 20 U.S.C. Â§ 1087f, applies to FDLP loans. Section 1087f(a)(1) directs the Secretary to award federal loan servicing contracts to eligible servicers "to the extent practicable." The Secretary may enter into servicing contracts only with "entities which the Secretary determines are qualified to provide such services" that possess "extensive and relevant experience and demonstrated effectiveness." Additionally, "[i]n awarding such contracts, the Secretary" must "ensure that such services . . . are provided at competitive prices." Yet another provision that has been particularly critical to the current legal debate over student loan servicing regulations is 20 U.S.C. Â§ 1098g's express preemption provision, which states that "[l]oans made, insured, or guaranteed pursuant to a program authorized by Title IV of the [HEA] shall not be subject to any disclosure requirements of any State law." As explained below, courts have reached divergent conclusions regarding the significance of this statutory provision. Regulations Regulations Specifically Governing Loan Servicing ED has promulgated several servicing-related regulations under its rulemaking authority under Title IV of the HEA. Nearly all of these regulations are codified in Part 682 of Title 34 of the Code of Federal Regulations, which governs FFELP loans rather than FDLP loans. 34 C.F.R. Â§Â 682.203(a), for instance, contemplates that an FFELP lender "may contract or otherwise delegate the performance of its functions under" governing federal law "to a servicing agency," but emphasizes that doing so "does not relieve the . . . lender . . . of its duty to comply with" all applicable statutes and regulations. 34 C.F.R. Â§ 682.208 in turn prescribes actions that a servicer must take when servicing an FFELP loan, including "responding to borrower inquiries, establishing the terms of repayment, and reporting a borrower's enrollment and loan status information." Similarly, 34 C.F.R. Â§ 682.416 establishes administrative responsibility and financial responsibility standards that third-party servicers of FFELP loans must satisfy. In addition, 34 C.F.R. Â§ 682.416(e) imposes auditing requirements on servicers of FFELP loans. Should a servicer violate any of the federal requirements that apply to it, Subpart G of Part 682 establishes a variety of procedures for addressing those violations, including administrative proceedings to limit, suspend, or terminate the servicer's eligibility to enter into servicing contracts. It is unclear whetherâand, if so, to what extentâthese FFELP loan servicing regulations apply to servicers of FDLP loans. Section 1087e(a)(1) of the HEA provides that, with certain exceptions, FDLP loans "shall have the same terms, conditions, and benefits" as FFELP loans. At least one court has therefore concluded that Section 1087e(a)(1) embodies a general congressional preference that FDLP and FFELP loans be governed by the same legal standards. The few judicial opinions interpreting Section 1087e(a)(1) do not conclusively resolve, however, whether FFELP regulations governing third-party servicers qualify as "terms, conditions, and benefits" of FFELP loans that would apply equally to FDLP servicers. Furthermore, courts considering whether FFELP regulations apply to FDLP loans outside the loan-servicing context have reached divergent conclusions. Nor do the portions of the servicing contracts that FSA has posted on its website specify whether servicers of FDLP loans must follow the FFELP servicing regulations. It is possible, however, that ED may nonetheless demand or expect its FDLP servicers to comply with some or all of the FFELP servicing standards. Moreover, some servicers have implicitly suggested in litigation briefs that at least some of the FFELP servicing regulations apply to FDLP servicers. General Regulatory Duties That ED Has Delegated to Servicers In addition to regulations that directly concern loan servicing, ED has also promulgated regulations establishing various responsibilities that the Secretary must fulfill, which the Secretary has in turn delegated to servicers. 34 C.F.R. Â§ 685.221(e)(3), for instance, requires the Secretary to "notif[y] the borrower in writing of" the requirement to regularly submit income recertification information to remain eligible to participate in an income-driven repayment (IDR) plan, which this report details below. ED has delegated that notification responsibility to servicers with which it contracts. Servicer Contracts with the Federal Government Pursuant its authority to enter into servicing contracts, ED has contracted with multiple entities to service federal student loans. These contracts govern many details of those servicers' operations, including financial reporting, transaction management, internal controls, accounting, and security. The servicing contracts also contain several mechanisms that ED may invoke against servicers that violate applicable federal requirements, including (1) ordering the noncompliant servicer "to return any fees that [it] billed to [ED] from the time of noncompliance" or (2) "reallocating new loan volume to other servicers or transferring all or part of the noncompliant servicer's current loan volume to another servicer until the noncompliant servicer comes back into compliance." Interested parties disagree, however, whether ED uses these contractual provisions with sufficient frequency and diligence to effectively punish and deter servicer misconduct. Role of the Consumer Financial Protection Bureau In addition to ED's own oversight of its servicing relationships, the Consumer Financial Protection Bureau (CFPB) is another federal agency that possesses certain authorities as to federal student loan servicers. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB may exercise supervisory authority over certain nonbank "larger participants" in consumer financial product or service markets that it chooses to define by rule. In 2013, the CFPB exercised this authority to define larger participants in the student loan servicing market. Pursuant to the rule, the CFPB has supervisory authority over student loan servicers servicing more than 1 million accounts. The purposes of CFPB supervision include assessing compliance with consumer financial protection laws and detecting risks to consumers and consumer financial markets. By statute, the CFPB may conduct examinations as well as request information from supervised entities. In addition to its supervisory authority, the CFPB may bring enforcement actions against student loan servicers. In January 2017, for instance, the CFPB sued one of the largest federal student loan servicers, Navient Corporation. As of the date of this report, the case currently remains pending. Notably, questions have arisen regarding the relationship between the CFPB and ED. In the early 2010s, the two agencies entered into Memoranda of Understanding (MOUs) (1) providing for interagency sharing of information pertaining to, among other things, complaints about student loan servicers and (2) coordinating supervisory and oversight activities pertaining to student loans. However, ED terminated these MOUs in 2017. Among its reasons for terminating the MOUs, ED asserted that the CFPB had "unilaterally expand[ed] its oversight role to include the Department's contracted federal loan servicers" in derogation of ED's claimed "full oversight responsibility for federal student loans." The CFPB further represented to Congress in April 2019 that "student loan servicers have declined to produce information requested by the [CFPB] for supervisory examinations related to" FDLP and FFELP loans since 2017. Allegations of Servicer Misconduct As described below, some claim that the aforementioned federal requirements and oversight mechanisms have not deterred federal student loan servicers from engaging in misconduct. Forbearance Steering Some, for instance, have accused federal student loan servicers of steering borrowers toward forbearance when participating in an IDR plan would be more beneficial for the borrower. Forbearance is a way for a borrower who encounters short-term financial hardship to obtain temporary relief from his obligation to repay a federal student loan. Forbearance allows the borrower to either temporarily cease making student loan payments; temporarily make smaller student loan payments; or extend the deadline by which the borrower must make payments. Interest, however, typically continues to accrue on the loan during the forbearance period, which is then capitalizedâthat is, added to the loan principal âwhen the forbearance period concludes. Thus, for borrowers experiencing long -term financial hardship, this interest accrual and capitalization may render forbearance less advantageous than participation in an IDR plan, the latter of which allows borrowers to make reduced monthly payments based on their income and offers them the prospect of obtaining loan forgiveness after making such payments over a specified period of years. Some allege that certain servicers have systematically encouraged borrowers to enter into forbearance rather than participate in IDR plans that would be more advantageous for the borrower. According to critics, servicers have a financial incentive to steer borrowers into forbearance because enrolling a borrower in an IDR plan requires the servicer to expend more resources than steering the borrower toward forbearance. Representatives from the servicing industry, however, deny that servicers engage in forbearance steering and assert that servicers in fact earn less money when borrowers enter forbearance. Income Recertification Some have also accused servicers of failing to provide critical information to student loan borrowers regarding the income recertification process a borrower must complete to remain in an IDR plan. Because, as noted above, a borrower's monthly payments under an IDR plan depend on the borrower's income, borrowers enrolled in IDR plans must recertify their income and family size each year. A borrower who does not comply with this annual recertification requirement may experience an increase in both his monthly loan payments and his total loan balance. Critics have accused some servicers of failing to "advise borrowers of the negative consequences of failing to submit timely, complete, and correct recertifications to renew borrowers' IDR plans." Loan Forgiveness Eligibility Some borrowers also allege that federal student loan servicers misinformed them about their eligibility for loan forgiveness under federal law. Subject to various conditions, the Public Service Loan Forgiveness (PSLF) program affords loan forgiveness to borrowers who make 10 years of monthly loan payments while employed in a public service job. Critically, however, only loans issued under the FDLP qualify for the PSLF program. Some borrowers claim that they relied to their detriment on their servicers' representations that they qualified for forgiveness under the PSLF program, only to later learn that they were in fact ineligible because their student loans were non-FDLP loans, such as FFELP loans. State Laws Regulating Servicers of Federal Student Loans Significantly, the HEA does not provide litigants with a private right of actionâthat is, the HEA does not authorize borrowers to directly pursue civil litigation against servicers of federal student loans. Instead, only the Secretary may enforce the HEA. States, however, have developed their own laws empowering entities other than the federal governmentâsuch as state officials or individual borrowersâto pursue legal action against servicers. These state laws fall into two broad categories: (1) statutes that specifically target servicers for regulation and (2) statutes and common law causes of action that apply more generally to a broad range of entities, including servicers of federal student loans. State Laws Governing Student Loan Servicers Specifically First, several states have recently enacted legislation that specifically imposes legal requirements on federal student loan servicers beyond what federal law requires. Because the specifics of each statute vary from state to state, the following subsections of this report survey the most significant similarities and differences between the various state servicing laws. Some state servicing statutes, for instance, prohibit student loan servicers from operating within the state's boundaries unless they maintain an active servicing license issued by the state. A servicer that operates in one of these states without a license is subject to monetary penalties. These statutes also typically provide that the state may revoke a servicer's licenseâand thereby preclude the servicer from servicing loans within the stateâif the servicer engages in specified acts of misconduct. For example, the District of Columbia's servicer licensing statute states that the Commissioner of the District of Columbia Department of Insurance, Securities, and Banking "may revoke" a student loan servicing license "if, after notice and a hearing, the Commissioner finds that the licensee has" "[d]emonstrated incompetency or untrustworthiness to act as a licensee" or "[c]ommitted any fraudulent acts, engaged in any dishonest activities, or made any misrepresentation in any business transaction." Notably, some of these state licensing statutes contain provisions that appear intended to mitigate potential interference with the federal government and the servicers with which it contracts. For example, New York's servicing statute, which becomes effective on October 9, 2019, will provide that entities hired by ED to service federal student loans will automatically be deemed licensed to service those loans, without the need to submit a license application and otherwise meet the prerequisites for licensure. However, the New York statute will still require federal student loan servicers to comply with many of the statute's other requirements. Several other states, including Colorado and Maine, have likewise enacted similar laws allowing for automatic licensure for federal student loan servicers. Some state statutes designate a student loan ombudsperson to conduct oversight of servicers' operations, review and attempt to resolve borrowers' complaints about student loan servicers, and otherwise assist and educate borrowers with the loan servicing process. Some of these statutes contemplate that if the ombudsperson discovers that a servicer is engaging in unlawful conduct, he may refer that servicer to the responsible state agency for civil enforcement proceedings or even criminal prosecution. In response to allegations that some federal student loan servicers have steered borrowers toward forbearance instead of an IDR program, some states have also enacted laws requiring servicers to evaluate the borrower's eligibility for IDR plans before placing the borrower in forbearance. Relatedly, at least one state prohibits servicers "from implementing any compensation plan that has the intended or actual effect of incentivizing a repayment specialist to violate" applicable servicing regulations "or any other measure that encourages undue haste or lack of quality." Similarly, in response to allegations that servicers have failed to provide borrowers with key information about income recertification, at least one state requires servicers to "disclose the date that a borrower's [IDR] plan certification will expire and the consequences to the borrower for failing to recertify by the date, including the new repayment amount." A few state statutes also attempt to address concerns that some servicers have misinformed borrowers regarding their eligibility for loan forgiveness programs, such as the PSLF. The State of Washington, for instance, makes it unlawful to "[m]isrepresent or omit any material information" about "the availability of loan discharge or forgiveness options." A number of states have also enacted statutory provisions to regulate various other aspects of servicers' operations. For instance, some state statutes purport to require servicers to acknowledge and respond to borrower complaints and requests within a specified time frame. Several statutes also impose recordkeeping or annual reporting requirements upon servicers. Additionally, some laws require servicers to inform the borrower if the identity or address of the party to whom the borrower must send payments or communications changes. There are a host of different remedies for violating state servicing laws. Some states, for instance, have authorized borrowers to pursue a private cause of action against a servicer who violates the state's servicing laws. A Maine statute that becomes effective January 1, 2020, for example, will authorize borrowers to recover compensatory, treble, and punitive damagesâas well as costs and attorney's feesâfrom servicers who violate the statute's prohibitions. As an alternative to enforcement by private litigants, some state statutes authorize the government to (1) levy fines or penalties against servicers who commit specified acts or omissions or (2) sue servicers who violate the state's servicing laws. Some state servicing statutes explicitly contemplate enforcement by both individual borrowers and the state government alike. Whereas the aforementioned provisions impose servicing requirements that go beyond federal law, some state statutes also incorporate existing federal servicing standards by reference and thereby provide state law remedies for alleged violations of federal requirements. A Connecticut statute, for instance, provides that in addition to complying with all requirements imposed by Connecticut law, a student loan servicer must also "comply with all applicable federal laws and regulations relating to student loan servicing." "[A] violation of any such federal law or regulation shall be deemed a violation of" Connecticut law "and a basis upon which the [Connecticut Banking Commissioner] may take enforcement action" against a noncompliant servicer. State Laws of General Applicability In addition to these statutes that specifically purport to regulate student loan servicers, servicers may also be bound by a state's laws of general applicability. For example, many states have enacted consumer protection statutes that purport to apply to various entities and prohibit an array of activities that state legislatures have deemed deceptive or unfair to consumers. As explained below, some borrowers and states have invoked these consumer protection statutes in civil lawsuits against servicers challenging various forms of alleged misconduct. Additionally, state courts typically recognize common law causes of action for acts like fraud, negligent or fraudulent misrepresentation, breach of fiduciary duty, negligence, unjust enrichment, tortious interference, and breach of contract. Some borrowers have likewise invoked (or tried to invoke) these common law doctrines against servicers allegedly engaged in misconduct. Preemption and the Interaction of Federal and State Servicing Laws With both federal and state laws coexisting in the realm of federal student loan servicing regulations, questions of federal preemptionâthat is, questions regarding whether federal law in a given area displaces or overrides state laws in that areaâhave arisen. Federal Preemption Under case law interpreting the Constitution's Supremacy Clause, federal law can preempt conflicting state law in two central ways. First, statutory language that express ly addresses the scope of a law's preemptive effect, such as the express preemption clause in 20 U.S.C. Â§Â 1098g, may be the basis to conclude that Congress intended federal law to supersede certain state laws. Second, even if a statute is silent as to Congress's preemptive intent, implied preemption principles can also displace state law. A statute can implicitly preempt state law where (1) the scheme of federal regulation is so pervasive, or the federal interest is so dominant, that it can be presumed that Congress intended to supplant all state laws in a particular area (also known as "field preemption"); or (2) the state law conflicts with federal law by either making it impossible to simultaneously comply with both laws or by frustrating the purposes and objectives of the federal law (also known as "conflict preemption"). For each type of preemption, congressional intent is the touchstone of courts' analyses. Influencing the preemption analysis, courts have, at times, employed a "presumption against preemption," meaning that they begin with an assumption that Congress did not intend to displace state law, particularly in areas falling within the traditional police powers of the states. ED's Interpretation Invoking several of these principles of federal preemption, in March 2018 ED announced its own position on the issueâthat is, that federal law preempts a wide range of state laws that regulate federal student loan servicers. Significantly, ED did not promulgate this interpretation through notice-and-comment rulemaking; it instead published its interpretation in the Federal Register as an informal guidance document. Among other things, the ED interpretation claims that federal law displaces state laws that "impose regulatory requirements on servicing," such as laws that "impose deadlines on servicers for responding to borrower inquiries" or "require specific procedures to resolve borrower disputes"; state regulations "requiring licensure of servicers" of certain federal student loans; and state requirements concerning what servicers must disclose to borrowers. ED appears to ground its interpretation in several preemption theories, including conflict preemption (i.e., that state servicing laws allegedly impede Congress's objective of establishing uniform federal loan servicing standards) and field preemption (i.e., that existing federal regulation is comprehensive and adequate, leaving no role for additional state regulation). ED also relies on express preemption principles, arguing that 20 U.S.C. Â§ 1098g's preemption provisionâstating that "[l]oans made, insured, or guaranteed pursuant to a program authorized by Title IV of the [HEA] shall not be subject to any disclosure requirements of any State law"âbroadly bars states from imposing disclosure requirements. ED "interprets the term 'disclosure requirements' under section 1098g . . . to encompass" not only written disclosures, but also "informal or non-written communications to borrowers." In addition to issuing this interpretation, ED has also submitted filings in several cases , asking courts to dismiss lawsuits against student loan servicers on preemption grounds or otherwise narrow or invalidate state regulations. Recent Litigation ED's interpretation and its litigation position have fueled the debate between states and plaintiff borrowers on one sideâwho claim that state servicing statutes may harmoniously exist alongside federal laws and policiesâand ED and federal student loan servicers on the other, who claim that those state regulations irreconcilably conflict with supreme federal law. Federal courts addressing these disputes, as discussed below, have analyzed the applicability of field preemption, conflict preemption, and express preemption to state student loan servicing laws and state law claims against federal student loan servicers. In doing so, the courts have afforded varying levels of weight to ED's interpretation in conducting their preemption analyses. Field Preemption Courts have somewhat readily concluded that the HEA does not occupy the field of federal student loan servicing regulation. As an initial matter, several federal appellate courts over the past 25 yearsâin analyzing different legal contexts in the realm of higher educationâhave held that the HEA does not have field preemptive effect more generally. For example, in one such case involving state law negligence claims against national school accrediting agencies (which ED approves pursuant to the HEA), the Ninth Circuit concluded that Congress, in enacting the HEA, "expected state law to operate in much of the field in which it was legislating." Although courts have recognized that the HEA is comprehensive, they have also noted that a regulatory regime's comprehensiveness on its own does not necessarily result in field preemption. Moreover, courts have observed that scattered throughout the HEA are several express preemption provisions, which explicitly foreclose certain state lawsâsuch as state usury, garnishment, and, with respect to Section 1098g, disclosure laws. Such explicit preemption provisions, courts have reasoned, would not be necessary if Congress had intended to simply supplant all state laws. When it comes to student loan servicing specifically, courts have uniformly rejected the argument that in the HEA Congress intended for federal regulation of federal student loan servicers to be an exclusive field. The HEA provides ED with the authority to contract with student loan servicers and to "establish minimum standards" governing those servicers' management and accountability. The district court in Student Loan Servicing Alliance v. District of Columbia , for example, concluded that this language merely sets a federal regulatory "floor," without foreclosing supplemental regulation from the states. The servicers in Student Loan Servicing Alliance further raised the argument that the federal government has a dominant interest in regulating federal student loan servicing that would merit field preemptionâparticularly because, with the discontinuation of the FFELP, the federal government now makes over 90% of new student loans through the FDLP. The servicers argued, accordingly, that the federal government has a unique interest in protecting its rights under its servicing contracts for these loans. However, in weighing the federal interests against the "compelling" interest of states in protecting their consumers, the Student Loan Servicing Alliance court concluded that the federal interest was not dominant enough to preclude state regulation. Conflict Preemption Although field preemption arguments have not thus far posed a hurdle to state student loan servicing regulation, the federal district court in Student Loan Servicing Alliance recently invalidated significant portions of the District of Columbia's student loan servicing law under conflict preemption principles. In its student loan servicing law passed in 2016, the District of Columbia (DC) required student loan servicers to obtain a license from DC and adhere to other substantive regulations and standards of conduct. While one of the primary points raised in ED's Interpretation, as discussed above, was that this type of state licensing scheme conflicted with federal law, the court determined that it did not have to give ED's Interpretation any deference. Rather, the court concluded that the ED Interpretation consisted of informal agency guidance that was insufficiently "thorough, consistent, and persuasive." Yet, in performing its own independent analysis, the district court still held that DC's licensing scheme posed an obstacle to the federal law's underlying purpose by undermining ED's authorityâprovided for in the HEAâto select servicers for federal student loans. The court relied on a line of prior federal cases arising in different legal contexts that preempted state laws' impeding the federal government's ability to contract. The court reasoned that the DC law did so by effectively "second-guess ing " the federal government's decisions to contract with a given loan servicer. The court's reasoning applied to FDLP loans and government-owned FFELP loans (e.g., those that ED purchased under ECASLA) , for which ED makes servicer contracting decisions under the HEA. The court held, however, that federal law did not preempt state regulations of servicers of outstanding commercial FFELP loans, where private lenders own and decide whether to contract with student loan servicers and the federal government acts merely as a reinsurer or a guarantor. Beyond the Student Loan Servicing Alliance case and its preemption of DC's licensing requirement for federal student loan servicers, however, courts have generally declined to find conflict preemption in suits brought against servicers for misrepresentations under state laws of general applicability. The main argument that federal student loan servicers have raised in this context is that plaintiffs' ability to sue under state law poses an obstacle to the HEA's objective of providing uniformity in federal student loan servicing regulation, subjecting servicers instead to actions under the laws of 50 different states and DC. However, uniformity is not a stated goal of the HEA. While certain cases have concluded that uniformity is one of the statute's purposes (albeit in arguably distinguishable contexts), other courts have declined to reach that result. Courts have also reasoned that even if uniformity were an objective of the HEA, it does not follow that enforcing state laws prohibiting deceptive conduct would serve as an obstacle to uniformity in the HEA's standards because "uniformity in setting . . . standard parameters for the federal student loan programs is not harmed by prohibiting unfair or deceptive conduct in operating those programs. Moreover, as several courts have noted, a broad reading of servicers' uniformity argument would in effect be akin to a finding of HEA field preemption, which courts have consistently declined to recognize. Courts have also considered whether the Supreme Court's holding in Boyle v. United Technologies Corp . prevents the states from regulating activities that servicers perform under contracts with the federal government. Boyle held that plaintiffs could not pursue state law claims against federal contractors when allowing such claims to proceed would either create "a 'significant conflict'" with "an identifiable 'federal policy or interest'" or "'frustrate specific objectives' of federal legislation." In the 2019 case of Nelson v. Great Lakes Educational Loan Services, Inc. , for example, the Seventh Circuit determinedâalbeit with little elaborationâthat allowing a borrower to pursue state law misrepresentation claims against a servicer would not impermissibly conflict with federal interests or objectives. Express Preemption Express preemption arguments in recent federal student loan servicing cases have centered on the preemption clause in Section 1098g of the HEA. Specifically, courts have grappled with whether the preemptive language in Section 1098gâwhich prohibits states from imposing "disclosure requirements" regarding federal student loansâprecludes suits against servicers brought under state law for misrepresentations or misleading communications made to federal student loan borrowers. Allegations in this category of lawsuits primarily include forbearance steering and misstatements regarding loan forgiveness eligibility, with the allegedly false or misleading statements in many cases being made over the telephone by the servicers' call center representatives. Specifically, some plaintiffs claim that they were "steered" toward placing their loans into forbearance rather than being informed of other options or enrolled in an IDR plan that may have been more beneficial in the long termâalleging that forbearance was simply a faster and less burdensome process for the servicer. Other plaintiffs recount, for example, being assured that they were on track to benefit from the PSLF program when that was not the case, thereby preventing them from taking remedial measures. Plaintiffs in these lawsuitsâwhich have included both federal student loan borrowers and state attorneys generalâhave brought state law tort claims or claims under state consumer protection statutes of general applicability. The main question at issue has been whether enforcing the state's law would require the servicers in these cases to make additional or different "disclosures" under Section 1098g. Most federal courts considering this question in cases based on these types of allegations have held that Section 1098g does not preempt state law. These courts have allowed the students' lawsuits to proceed, viewing their claims as involving affirmative misrepresentations or otherwise deceptive conduct, which the courts distinguished from the mere failure to provide "disclosures" under Section 1098g. For example, in Pennsylvania v. Navient Corp. , a federal district court in Pennsylvania ruled that the HEA did not preempt the plaintiff's state law claims regarding forbearance steering. The court reasoned that the defendant's argument went "too far" by framing the plaintiff's claim as one for lack of disclosure, rather than a claim concerning unfair and deceptive conduct subject to the state consumer protection statute. A federal district court in Florida in Lawson-Ross v. Great Lakes Higher Education Corp. , however, reached a different conclusion as to express preemption in 2018. The Lawson-Ross plaintiffs alleged that the defendant servicer falsely assured them that they were on track to benefit from PSLF (when they were not in fact eligible for the program), in violation of a Florida consumer protection statute and several state common law duties. The court concluded, however, that federal regulations already prescribe the information that must be provided to federal student loan borrowers, so that the plaintiffs' state law claims would essentially impose additional disclosure requirements on the servicer. Even though the plaintiffs argued that they alleged that the servicer had made an affirmative misrepresentation , the court construed the plaintiffs' claim as one for the servicer's failure to disclose accurate information regarding plaintiffs' eligibility, which it held to be impermissible under Section 1098g. In reaching its conclusion, the Lawson-Ross court afforded Skidmore deference to ED's interpretation after concluding that ED's views on the preemptive effect of federal law were "well-reasoned and sensible." The Lawson-Ross court, and servicers arguing for preemption in similar cases, also relied for support on a 2010 case from the Ninth Circuit called Chae v. SLM Corp oration . In Chae , students sued a federal student loan servicer challenging certain methods it used to calculate interest, late fees, and repayment dates, claiming that these servicing practices rendered their billing statements, coupon books, and loan applications misleading in violation of a state consumer protection law. The court reasoned that Section 1098g preempted the action, stating that "[a]t bottom, the plaintiffs' misrepresentation claims are improper-disclosure claims" and that "[i]n this context, the state-law prohibition on misrepresenting a business practice 'is merely the converse' of a state-law requirement that alternative disclosures be made." While the Lawson-Ross court extended Chae 's logic to servicers' oral misrepresentations about PSLF eligibility, other courts have distinguished Chae , noting, for example, that Chae involved allegations concerning the misleading nature of written account statements and coupon books (i.e., "highly prescribed standardized forms"), rather than the "affirmative misconduct" and types of misleading communications involved in forbearance steering or PSLF allegations. The landscape of decisions concerning Section 1098g's preemptive scope is subject to change as further appellate courts begin to address the issue. Notably, appeals in t he Pennsylvania and Lawson-Ross cases are pending. Moreover, the Nelson case, decided by the Seventh Circuit, may be appealed to the U.S. Supreme Court. Considerations for Congress Legal debates over the preemptive effect of federal lawâboth within the student loan servicing context and withoutâimplicate a variety of considerations. On the one hand, replacing state law with a single uniform national standard can sometimes be advantageous. When each state remains free to enact its own laws on a given topic, the requirements of those laws may differâperhaps irreconcilablyâfrom jurisdiction to jurisdiction. Preempting those state laws can thereby release regulated parties from the "administrative and financial burden[s]" of learning and complying with the "laws of 50 States." Moreover, freeing federal contractors from the burden of complying with state laws could mitigate the risk of state intrusions upon federal prerogatives. On the other hand, however, when federal law does not go far enough in policing a particular industry, preemption can prevent the states from filling those regulatory gaps with their own laws. Preempting state law may also deprive the states of opportunities to experiment with novel methods of regulating particular industries and behaviors, which might ultimately prove more effective than methods devised by the federal government. Depending on how Congress weighs these competing considerations, it may enact legislation clarifying or modifying the preemptive effect of federal law in the student loan servicing context. For example, a section of the PROSPER Act introduced in the 115th Congress, if enacted, would have provided that the servicing of student loans under Title IV of the HEA would "not be subject to any law or other requirement of any State or political subdivision of a State with respect to" "disclosure requirements"; "requirements or restrictions on the content, time, quantity, or frequency of communications with borrowers, endorsers, or references with respect to such loans"; or "any other requirement relating to the servicing . . . of a loan made" under Title IV of the HEA. Alternatively, if Congress instead intends to limit the preemptive scope of federal law, it could enact a savings clause specifying that federal law does not preempt any state law that imposes more restrictive requirements on federal student loan servicers than federal statutes and regulations. For instance, one section of the Student Loan Borrower Bill of Rights (S. 1354, 116th Cong.)âwhich, among other things, proposes to subject servicers to more expansive federal regulationâexplicitly would not "preempt any provision of State law regarding postsecondary education loans where the State law provides stronger consumer protections." If Congress ultimately decides to displace state servicing laws, it may consider preempting state law either narrowly or broadly. For instance, a federal statute that displaces state servicing regulations could expressly preempt all state laws that implicate the servicing of federal student loans in any fashion, or it could preempt only specified categories of state statutes (such as servicer licensing requirements) and thereby preserve some regulatory role for the states. Instead of expressly specifying the preemptive effect and scope of federal laws pertaining to federal student loan servicing, Congress could implicitly preempt state laws by changing the substantive standards governing servicers. Several Members of the 116th Congress have introduced legislation that, if enacted, would clarify or broaden servicers' duties and responsibilities under federal law or subject servicers to increased levels of federal oversight. Depending on their content and scope, new federal laws governing the conduct, obligations, and oversight of federal loan servicers could raise legal questions regarding (1) how those federal standards interact with state servicing laws and (2) the respective roles of federal and state law in regulating federal student loan servicers. The preemptive effect that courts will provide to a given federal law largely depends on the specific statutory text that Congress enacts. One other substantive change that could affect the preemptive scope of federal law is altering how the HEA is enforced. As discussed, the HEA does not presently create a private right of action; instead, the HEA contemplates that ED alone will enforce the statute's mandates. As noted above, however, some observers claim that ED has not diligently policed the servicers with whom it contracts. If Congress agrees with that assessment, it could expressly empower other entitiesâsuch as states, individual borrowers, or other federal agencies like the CFPBâto wield a greater level of enforcement authority over federal student loan servicers. For instance, granting borrowers or states a private right of action under federal law against contractors that violate federal servicing standards could provide an additional means to deter, correct, and punish alleged servicer misconduct. That said, subjecting servicers to litigation and regulation by multiple entities could increase federal contractors' costs. Rendering servicers answerable to multiple stakeholdersâbe they federal agencies, states, or individual borrowersâmight also undermine the uniformity that some have argued is a central goal of federal student loan servicer regulation, which could in turn undercut arguments that preemption is necessary to preserve the federal government's predominant role in regulating its contractors. Several bills pending in the 116th Congress propose to subject servicers to increased litigation or regulation by entities other than ED. Section 3 o f the Student Loan Borrower Bill of Rights, for example, would allow individuals to sue federal student loan servicers under the Truth in Lending Act's private right of action provision. By contrast, the CFPB Student Loan Integrity and Transparency Act of 2019 (H.R. 2833, 116th Cong.) would (among other things) (1) require federal student loan servicers to provide the CFPB with any information requested by specified CFPB officials and (2) reinstate the aforementioned MOUs between ED and the CFPB that ED terminated in 2017. Unless and until Congress specifies the intended preemptive effect of federal servicing laws, however, legal questions regarding preemption in the loan servicing context will be left to the courts to resolve. Depending on their content, the courts' rulings may affect the uniformity of servicing regulations across jurisdictions and the degree and type of oversight to which federal student loan servicers are subject.


T he United States has experienced a series of high-profile violent crimes where the offenders' actions appeared to be motivated by their bias or animosity towards a particular race, ethnicity, or religion. For example, shootings at synagogues in Pittsburgh, PA, and Poway, CA; a driver speeding his car into protestors at a "Unite the Right" rally in Charlottesville, VA; a shooting at a Walmart in El Paso, TX, where the shooter allegedly said he was targeting "Mexicans" and espoused concerns about the "invasion" of the United States by immigrants; and reports of hate crimes against Asian-Americans during the Coronavirus pandemic contribute to a perception that hate crimes are on the rise in the United States. The salience of these events and how they are covered in the media might also contribute to the perception that there is a growing number of hate crimes (also known as bias crimes or bias-motivated offenses) being perpetrated in communities across the country. Policymakers might turn to hate crime data collected by the Department of Justice (DOJ) to understand if there has actually been an increase in hate crimes in the United States and, if so, the nature of the increase. Policymakers might also utilize these same data to craft a policy response to hate crimes that is grounded in the data and conduct oversight of the federal government's efforts to combat these crimes. This report begins with an overview of federal sources of data on hate crimes. This includes a brief overview of the Hate Crime Statistics Act (HCSA, P.L. 101-275 ), which requires DOJ to collect and report data on hate crimes, and the two systems DOJ employs to collect these data: the Federal Bureau of Investigation's (FBI's) Hate Crime Statistics Program and the Bureau of Justice Statistics' (BJS') National Crime Victimization Survey (NCVS). The report then discusses two salient issues regarding hate crime statistics: the large difference between the number of hate crimes reported by the FBI and the number of hate crime victimizations reported by BJS, and concerns about law enforcement agencies underreporting hate crimes to the FBI. The report concludes with a discussion of whether the wide-scale adoption of the FBI's National Incident Based Reporting System (NIBRS) might serve as a means of improving federal hate crime data. The Hate Crime Statistics Act The HCSA requires DOJ to collect and report data on crimes that "manifest evidence of prejudice based on race, gender and gender identity, religion, disability, sexual orientation, or ethnicity, including where appropriate the crimes of murder, non-negligent manslaughter; forcible rape; aggravated assault, simple assault, intimidation; arson; and destruction, damage or vandalism of property." Congress required DOJ to collect these data because, at the time, few states collected data on hate crimes and there were no national data. Policymakers believed that national data would reveal the scope of the problem and provide a basis for more effective law enforcement efforts to address hate crimes. Over the years since the HCSA was enacted, Congress has expanded the definition of what constitutes a hate crime for data collection purposes. The act initially required DOJ to collect data on hate crimes based on race, religion, sexual orientation, or ethnicity. In 2009, Congress amended the act to require DOJ to collect data on hate crimes based on the victims' gender or gender identity ( P.L. 111-84 ) or disability ( P.L. 103-322 ). P.L. 111-84 also required DOJ to collect and report data on hate crimes committed by and against juveniles. The HCSA initially included a sunset provision that would have ended the requirement for DOJ to collect hate crime data after 1994. However, the Church Arson Prevention Act ( P.L. 104-155 ) removed that provision. Federal Hate Crime Data To meet the requirements of the HCSA and subsequent amendments, DOJ collects and reports data on hate crimes that occur in the United States through two sources: the Hate Crime Statistics program and the NCVS. Hate Crime Statistics Program DOJ fulfills the HCSA's requirement by collecting supplemental data on hate crimes through the FBI's Uniform Crime Reporting (UCR) program. The Hate Crime Statistics Program collects data about hate crime offenders' bias motivations for the set of offenses already reported to the UCR program. Under the Hate Crime Statistics Program, the victim of a hate crime can be an individual, a business, an institution, or society as a whole. Hate Crime Statistics Program data is collected and reported to the FBI by law enforcement agencies across the country. Agency participation in the Hate Crime Statistics Program, like the UCR program, is voluntary but most agencies participate. In 2018, more than 16,100 law enforcement agencies in all 50 states and the District of Columbia participated in the Hate Crime Statistics Program. The agencies that participated represented jurisdictions that include nearly 307 million people. For a point of comparison, in 2008 there were a reported 17,985 state and local law enforcement agencies that employed at least one full-time officer or the equivalent in part-time officers. The FBI requires law enforcement agencies to use a two-step process for investigating hate crimes before reporting them to the Hate Crime Statistics Program. In the first step, the law enforcement officer that initially responds to a potential hate crime incident is responsible for determining whether there is any indication that the offense was motivated by bias against an individual's perceived membership in one of the groups specified in the HCSA. If there is an indication of a bias motivation, the incident is designated as a suspected bias-motivated crime and forwarded to an investigator. In the second step, the investigator is responsible for reviewing the facts of the incident and making the final determination as to whether the crime meets the HCSA definition of a hate crime. According to the FBI, an agency should only report an incident as a hate crime when a law enforcement investigation reveals sufficient evidence to lead a reasonable and prudent person to conclude that the offender's actions were motivated, in whole or in part, by his or her bias. Law enforcement agencies can submit data on single and multiple bias incidents. Single bias incidents are those in which one or more of the offenses committed during an incident are motivated by the same bias. Multiple bias incidents are those in which one or more of the offenses committed during an incident are motivated by two or more biases. Annual hate crime data published by the FBI differs from traditional UCR crime data published by the FBI in an important way. For most crimes, the FBI estimates full-year crime data for law enforcement agencies that submit less than 12 months of data to the UCR. In contrast, hate crime data published by the FBI only includes offenses reported by the police; no estimation for missing data is done by the FBI for the Hate Crime Statistics Program. National Crime Victimization Survey BJS has collected data on hate crime victimizations through the NCVS since 2003. The NCVS data is collected through annual interviews with residents of a nationally representative sample of households. All people age 12 or older in the sampled households are interviewed. The NCVS collects self-reported data on non-fatal personal crime victimizations (sexual assault, robbery, aggravated and simple assaults, and personal larceny) and property crime victimizations (burglary, motor vehicle theft, and other thefts) regardless of whether the crimes were reported to the police. The NCVS uses the same HCSA definition of a hate crime as the FBI. The NCVS collects data on crimes that victims perceive to be motivated by an offender's bias against them based on their race, gender and gender identity, religion, disability, sexual orientation, or ethnicity. Hate crime victimizations are counts of "a single victim or household that experienced a criminal incident believed by the victim to be motivated by hate." In the NCVS data, hate crime victimizations for personal crimes are counts of individual victims, while hate crime victimizations for property crimes are counts of victimized households. In order for a victimization to be classified as a hate crime in the NCVS, the victim has to report one of three types of evidence of the offender's bias: (1) the offender used hate language, (2) the offender left hate signs or symbols at the scene, or (3) police investigators confirmed that a hate crime occurred. Table 1 compares the methodologies of the UCR Hate Crime Statistics Program and the NCVS. Differences in the Two National Measures of Hate Crimes A perennial issue that can cause confusion for those unfamiliar with the FBI's and BJS's data collection goals and methodologies is the difference between the number of hate crime incidents reported by the FBI and the number of hate crime victimizations reported by BJS. For example, for 2018 (the most recent data available) the FBI reported that there were approximately 7,100 hate crime incidents that involved approximately 8,800 victims. In comparison, BJS reported that there were an estimated 198,000 hate crime victimizations in 2017. What might explain the difference in the two national measures of hate crimes? The answer lies partially in the fact that the data reported by the FBI and BJS reflect different goals for collecting data on hate crimes. The FBI data only reflect hate crime incidents that are reported to law enforcement, and where law enforcement concludes that a hate crime has occurred and reports it to the FBI's Hate Crime Statistics Program. In contrast, the goal of the NCVS hate crime data collection effort is to estimate the total number of hate crime victimizations that occur each year, including victimizations that are not reported to law enforcement agencies (i.e., a portion of the dark figure of crime). Because the NCVS collects data on reported and unreported hate crime victimizations, its totals will always be larger than the FBI's hate crime data. Another explanation for the difference between the two measures are the different standards needed to be met to be counted as a hate crime in the FBI's Hate Crime Statistics Program and the NCVS. For a hate crime to be counted by the FBI, law enforcement must have sufficient evidence that would lead a reasonable and prudent person to conclude that the offender's actions were motivated, in whole or in part, by his or her bias. In contrast, under the NCVS, an incident is counted as a hate crime if the victim believes that the offense was based on their race, ethnicity, religion, disability, sexual orientation, gender, or gender identity, and the offender used hate language, hate symbols, or a law enforcement investigation concluded that a hate crime had occurred. An independent investigation of the perceived bias is not necessary in every case for the NCVS interviewers to include the offense as a hate crime. The goals and methodologies described above help explain why the NCVS estimates of hate crime victimizations are higher than the number of hate crime incidents reported by the FBI. At the same time, the FBI's Hate Crime Statistics Program collects data on a larger number of victim types and crimes that may be motivated by the offender's bias than the NCVS. For example, the FBI collects data on bias motivated homicides and vandalisms, which are not be captured by the NCVS. Law enforcement agencies can also report data on hate crimes against individuals, businesses, religious institutions, other institutions, and society as a whole to the FBI, whereas the NCVS only collects data on hate crimes against individuals (i.e., personal crimes) and households (i.e., property crimes). Are Hate Crimes Underreported to the FBI by Law Enforcement? A common criticism of the FBI's hate crime data is that a large proportion of participating law enforcement agencies report zero hate crimes in a given year ( zero-reporting agencies ), leading some advocacy groups to accuse the zero-reporting agencies of underreporting hate crimes. The evidence presented to support these accusations are discrepancies between hate crime figures reported by the FBI and the self-reported hate crime figures tabulated by community organizations serving the communities that are often the targets of hate crime (e.g., organizations serving the LGBTQ, Jewish, Muslim, or Arab communities). Research suggests that some law enforcement agencies have underreported the number of hate crime incidents to the FBI. In one study, researchers reviewed a sample of assault incident reports from seven local law enforcement agencies across the country that were not classified as hate crimes to see if there was any indication that the offenses had a bias motivation. Incidents where there was a clear indication that bias was a predominant motivating factor in the assault were coded as bias- motivated , and other incidents were coded as ambiguous if there was an indication of bias but also evidence of some other identifiable triggering event or alternative motivation. The study found that for some of the incidents, there was evidence that they were motivated by the alleged perpetrator's bias, but that these misclassification errors were relatively infrequent and varied by law enforcement agency. The estimated proportion of misclassified cases for each agency ranged from zero to 8% of all assault incidents when both bias- motivated and ambiguous incidents were considered and from zero to 3% when only bias- motivated cases were considered. While the proportion of misclassified assault cases for any individual agency is relatively low, if the percentage of misclassified cases reported in this study was generalizable to the universe of all assaults, it would account for thousands of hate crimes that were not reported to the Hate Crime Statistics Program. Another study of the accuracy of hate crime reporting utilized incident-based crime data (see discussion of expanding the National Incident Based Reporting System, below) from four local law enforcement agencies to evaluate whether hate crimes were being misclassified. This study looked at all criminal incidents, not just assaults, reported to the four agencies in 2008 and examined not only whether hate crimes were misclassified as non-bias-motivated offenses, but also whether non-bias-motivated offenses were wrongly classified as hate crimes and how these errors compared to misclassification errors for other non-hate crimes. This study found that undercounting of hate crimes was the most common misclassification error in the records they examined. The researchers noted that "extending error rates to the population suggest that the estimated number of bias crimes that go unaccounted is noticeable." Even though the research described above did not focus on local law enforcement agencies who reported zero hate crimes, it is these agencies in particular that critics argue are likely to have underreported hate crimes. As shown in Figure 1 , the vast majority of agencies that participate in the Hate Crime Statistics Program are zero-reporting agencies, leading critics to assume that hate crimes are significantly underreported to the FBI. In order for a law enforcement agency to be considered a "participant," it has to submit data on the number of hate crimes for at least part of the year or a letter signed by the police chief certifying that no hate crimes occurred that year in its jurisdiction. From 1996 to 2017, at least 80% of Hate Crime Statistics Program participating law enforcement agencies in any given year reported zero hate crimes. The proportion of participating law enforcement agencies that were zero-reporting agencies generally increased from 2001 to 2014. There was a slight decrease in this proportion after 2014, but in 2018 nearly 9 out of 10 participating law enforcement agencies reported zero hate crimes. Aside from misclassification errors, there are several reasons that might explain why a law enforcement agency does not report any hate crimes in a given year. The first, and most straightforward, reason is because no hate crimes occurred. Given that law enforcement agency jurisdictions include communities with as little as a few hundred residents, it is not implausible that some residents, especially those that live in very small and homogeneous communities, did not experience any hate crimes. Second, in order for a law enforcement agency to report a hate crime to the FBI, it must be reported to the police. Data from the NCVS indicates that on average, half of hate crime victimizations were not reported to the police from 2013 to 2017. Hate crime victims might choose not to report the incident to the police for a variety of reasons, including fear of retaliation, embarrassment that they were victimized, a belief that the crime was not motivated by the perpetrator's bias, lack of familiarity with a state's hate crime laws, distrust of law enforcement, a belief that law enforcement will not investigate the case, fear of being exposed as a member of the LGBTQ community, or fear of being re-traumatized by the criminal justice system. Even when a hate crime is reported to state and local law enforcement, an investigation must be conducted into the perceived bias to determine if the offense was bias-motivated before reporting it to the FBI as a hate crime. This step can be challenging for law enforcement agencies, especially small agencies with relatively few resources. When there is evidence that a hate crime might have occurred, law enforcement agencies have to complete additional investigative steps to determine whether an offense meets the statutory definition of a hate crime, and in some cases law enforcement officers might not be trained sufficiently on recognizing biases in crimes to conduct such investigations. Few states provide mandatory training for law enforcement officers on investigating, identifying, and reporting hate crimes, and in the states that do, there is little oversight to confirm that law enforcement officers are receiving the training and applying it correctly. Ambiguity in the circumstances surrounding hate crimes can also lead to an undercounting. Under the Hate Crime Statistics Program, law enforcement agencies report the number of hate crimes that were "motivated in whole or in part by bias." Law enforcement officers might have difficulty applying this standard in cases where a bias motivation might not be obvious, especially when considering hate crimes that were motivated "in part" by an offender's bias. While a cross burning on the front yard of a black family's home is an unambiguous hate crime, in other cases the motivation of the alleged perpetrators might not be so clear. These ambiguous hate crimes can be classified into two categories: response/retaliation events and target-selection events. Response/retaliation events are those where the offense was first triggered by something other than bias, but at some point bias exacerbates the incident into a hate crime. For example, a white motorist and a black motorist get into a dispute because their cars were involved in an accident. However, after a few minutes, the white motorist assaults the black motorist while yelling racial slurs. In this case, the incident was not initiated because of the white motorist's bias against the black motorist, but the white motorist's bias eventually resulted in him assaulting the black motorist. Target-selection events are those where a target of a crime is selected because of the offender's bias against members of the group, but the offender's bias in not obvious. For example, someone might rob men leaving bars that are known to be frequented by same sex couples because the offender believes they will be less likely to report the offense because they might not want to be identified as being a member of the LGBTQ community. In addition to issues related to law enforcement officer training on identifying hate crimes for submission to the FBI, differences in how a hate crime is defined under state law and under the HCSA can create its own ambiguities. For example, gender identity is a protected class under the HCSA, but it might not be a recognized bias motivation under a state's laws. As such, if a law enforcement officer is more familiar with the state's hate crime definition, he or she might not identify an offense based on gender-bias as a potential hate crime. As one group of researchers noted: Even when potential bias crimes are reported to a participating agency, the agency must then recognize any indications of bias, determine whether the incident is bias motivated, document the motivation, and submit the incident to UCR. Empirical evidence suggests that the processing of bias-crime reporting across participating law enforcement agencies is variable and subject to much error and interpretation by local departments. Improving Hate Crime Data: Considerations for Policymakers Congress passed the HCSA with the intent of collecting national data on bias-motivated offenses that could be used to inform federal hate crime policy. While DOJ has taken steps to collect these data, the hate crime data reported by the FBI is incomplete and the NCVS self-reported hate crime victimization data likely includes incidents that would not meet the legal standard needed to be charged as hate crime. Hate crime data "missing" from the FBI's Hate Crime Statistics program results from a series of complications associated with collecting these data (e.g., victims might not report the offense to the police, law enforcement agencies might fail to correctly identify potential hate crimes, or law enforcement agencies might not routinely and systematically report hate crime data to the FBI). Policymakers may have an interest in what steps Congress could take to help improve the quality of the FBI's hate crime data. One option on the horizon might be the wide-scale adoption of the National Incident Based Reporting System (NIBRS). The FBI is in the process of phasing out the UCR summary reporting system and having all law enforcement agencies submit data through NIBRS. The FBI reports that it will begin collecting only NIBRS-compliant data from law enforcement agencies starting on January 1, 2021. To support state and local law enforcement agencies' transitions to NIBRS, state and local governments that are not certified as NIBRS compliant have been required since FY2018 to use 3% of their award under the Edward Byrne Memorial Justice Assistance Grant (JAG) program to achieve compliance. Compared to the UCR summary reporting system, NIBRS collects more data on a wider variety of offenses. NIBRS asks participating law enforcement agencies to collect and report incident-level data on offenders, victims, the relationship between victims and offenders, and the circumstances surrounding the incident for 52 different offenses. In comparison, the current summary reporting system is largely a tabulation of the number of eight Part I offenses reported to the police. As a part of NIBRS, reporting agencies can identify whether an offense was motivated by an offender's bias against the victim for each reported offense. Under the Hate Crime Statistics Program, law enforcement agencies that are not currently submitting NIBRS-compliant data submit a supplemental summary report to the FBI when there is evidence that one or more crimes in their jurisdiction involved a bias motivation. It has been argued that hate crime reporting will increase as more agencies adopt NIBRS because reporting the presence or absence of bias motivations is built into NIBRS. In addition to making it easier for law enforcement agencies to report hate crimes to the FBI, NIBRS provides data on a wider variety of offenses, including those that were motivated by offenders' bias against their victims, and data on the context of hate crimes (e.g., locations where hate crimes occur, the relationship between alleged perpetrators and victims of hate crimes, whether alleged offenders are residents of the community where they committed their offenses, the weapons used in the offenses (if any), and the types and seriousness of injuries sustained by hate crime victims). While the FBI might stop accepting crime data from non-NIBRS compliant law enforcement agencies next year, participation in the program is still voluntary. If a law enforcement agency does not believe it is worth the time and effort to adopt NIBRS and the state does not mandate that it participates in the program, there is no federal mandate or incentive for the agency to participate. Therefore, policymakers might have an interest in what steps Congress could take to promote wide-scale adoption of the program. Congress could consider placing a condition on a program such as JAG that would require law enforcement agencies to submit NIBRS data to the FBI or face a penalty under the program. However, the JAG program already provides a financial incentive to participate fully in the FBI's crime reporting program. Half of a state's allocation is based on its proportion of the average number of violent crimes reported in the United States over the past three years, and allocations for local governments are based on their proportion of the average number of violent crimes reported in the state over the past three years. The Bureau of Justice Assistance reports that NIBRS data will be used to calculate JAG awards once NIBRS replaces the summary reporting system. In addition, in order for local governments to be eligible for a direct award under the program, they have to have submitted violent crime data for 3 of the past 10 years. Yet, even with these incentives some law enforcement agencies in the United States do not participate in the UCR because compiling the data can be difficult and time consuming, and many small agencies might not have the resources needed to fully comply with the FBI's data collection and submission requirements. Thus, Congress could also consider authorizing a new grant program that would provide funding to state and local governments to cover expenses related to transitioning to NIBRS, such as purchasing new software and computers, or training officers on how to use NIBRS. While NIBRS might provide some administrative efficiency with regard to reporting hate crimes, it does not address some of the other issues law enforcement agencies currently have with reporting hate crimes through the UCR program. Implementing NIBRS does not address hate crime victims being reluctant to report an offense to the police, the need for training for law enforcement officers on how to identify potential hate crimes, or the need to improve law enforcement agencies processes for investigating potential hate crimes, nor will it resolve differences between the HCSA and state hate crime definitions.