Student Loans Suck, But Here's How a Few States Are Making Them Suck Less

"What are your elected representatives doing to protect you from America's growing student loan debt epidemic? More than you might expect," according to The Penny Hoarder.

"A national Student Loan Borrower Bill of Rights stalled in congressional committee a few years ago, and education policy is in flux. But states are pushing forward to provide their own protections for students.

The most recent: Illinois.

The Student Loan Borrower Bill of Rights passed in both houses of the Illinois General Assembly on May 31, and now waits for approval by Gov. Bruce Rauner.

The bill would create a student loan ombudsman in the state attorney general’s office, require student loan servicers to obtain a state license and require servicers to hire specialists to better serve student inquiries.

Illinois is poised to become the third state with similar protections for student loan borrowers, which apply to anyone studying in the state where a bill of rights exists.

... Since every state has an office that regulates banking, state legislation can establish rules to govern student loan servicers though those offices, according to Generation Progress’ report, 'We Can’t Afford to Wait: How States and Municipalities Can Help Curtail the Student Debt Crisis.'

In states where these rules already exist, those banking regulators can enforce the rules. Creating an ombudsman position at the state level to volley borrower complaints would mirror the same role at the Consumer Financial Protection Bureau. The person in this role could work with the CFPB and the Department of Education to better assist borrower complaints.

'States contribute a lot of dollars to higher education. They have own grant and loan programs, and have a vested interest in making sure the students within their jurisdiction have rights and are protected,' Megan Coval, vice president for policy and federal relations at the National Association of Student Financial Aid Administrators (NASFAA), said."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 7/11/2017

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