After Education Secretary Betsy DeVos Rescinds Consumer Protections, Massachusetts Mulls More Regulations for Student Loan Industry

"If a company trying to collect on a student loan makes harassing calls or tries to steer students into more expensive repayment plans, who can investigate?" MassLive.com writes.

"Massachusetts is jumping into a national debate over whether states can govern student loan servicers or whether that should be left to the federal government. The issue has grown in urgency since U.S. Education Secretary Betsy DeVos rescinded some consumer protections.

State Sen. Eric Lesser, D-Longmeadow, introduced a bill, S.129, that would set up a new state licensing scheme for student loan servicers and create an ombudsman to handle student loan complaints.

'This bill create a one-stop shop for people facing complaints,' Lesser said. 'They'll know to call the ombudsman, who will have investigatory authority and can follow up on complaints, incorporate that into license renewals or evaluations.'

Lesser said his bill is about 'setting up a clear consumer oriented approach for the public, so the public knows who they call and where they turn to if students feels like they're getting harassed.'

Lesser's bill is one of numerous bills that have been introduced nationwide since 2015 to increase state regulation of student loan servicers. Connecticut that year became the first to pass a bill imposing state-level consumer protections on loan servicers, creating an ombudsman and imposing licensing requirements. Lawmakers in 13 states are considering similar legislation."

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: 9/15/2017


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