Why Massachusetts Needs Its Own Student Loan Bill of Rights
JULY 2019
Executive Summary
An alarming trend has emerged in which the federal government is systematically failing at overseeing student loan servicing agencies.
Reports show that since President Trump’s appointees assumed control of the CFPB, the agency has not taken a single substantive action to stand up for student loan borrowers.
The Trump/DeVos administration have signalled repeatedly that they will turn a blind eye to student loan servicers’ increasingly deceptive, predatory, and illegal practices.
Meanwhile, there is mounting evidence of too many instances where servicers routinely fail to advise borrowers about the right repayment plans, leaving them saddled to pay more debt than necessary.
According to the Federal Student Aid Office’s own reporting: 92 percent of the monitored calls had at least one instance of a servicer failing to inform a borrower about all available repayment options and 61 percent of the oversight reports included examples of loan servicers not following guidelines or the law.
In absence of federal leadership on regulating the loan servicing industry, states have no choice but to enact their own Student Loan Bills of Rights to protect their student loan borrowers from profit-seeking predatory actors.
Ten States have already enacted their own student loan borrower protections standards, with New York, Maine, Maryland, Colorado, and Nevada joining then in 2019. Other States, such as California, New Jersey, and Rhode Island are steps away from passing their own Student Loan Bill of Rights.
It’s now time for Massachusetts to protects its student loan borrowers!
Senator Eric Lesser and Representative Natalie Higgins, are leading such effort with “An Act establishing a student loan bill of rights” (S.160,H998) . The bill has gathered significant support by legislators and is backed by a coalition of organizations, including Student Borrower Protection Center (SBPC), Public Higher Education Network Of Massachusetts, MASSPIRG, The Institute of Student Loan Advisors, and Hildreth Institute
