For Immediate Release:
Thursday, September 10, 2020
For More Information:
Deirdre Cummings, MASSPIRG Legislative Director, 978-201-6093, [email protected]
John Coviello, MASSPIRG Organizer and UMass Amherst Class of 2020, 781-715-7694, [email protected]
BOSTON –– On behalf of students from 17 colleges across Massachusetts, 50 student leaders are urging state lawmakers to pass a Student Loan Borrowers Bill of Rights. This legislation is included in the economic development bill, An Act Enabling Partnerships for Growth (S.2874, H. 4887) that a six-member Conference Committee in the state legislature is considering.
“The Student Loan Borrower Bill of Rights will protect borrowers from unfair, predatory, and deceptive lending and loan servicing companies,” said Deirdre Cummings, MASSPIRG’s legislative director. “We need these protections more than ever as we struggle with the hardships associated with the spread of COVID-19.”
Data collected by the Institute for College Access and Success shows that in Massachusetts, nearly two-thirds of students graduating in 2018 from an undergraduate program graduated in debt — and those students had an average of $32,000 of student debt. In Massachusetts, we have 855,500 student loan borrowers who owe a collective $33 billion. Nationally, there is $1.5 trillion in outstanding student loan debt.
“With the cost of college tuition skyrocketing, more students and families are driven to seek student loans to pay for it,” said Brendan Geraghty, Statewide Board Chair for MASSPIRG Students and UMass Amherst class of 2021. “These common-sense consumer protections are needed and long overdue.”
“In addition to the student leaders, we are proud that more than 50 state and national civil rights, higher education, & consumer advocacy organizations also joined in urging Massachusetts lawmakers to pass the Student Borrower Bill of Rights, said Bahar Akman, Managing Director of the Hildreth Institute. “More than ever, we must promote financial security and economic justice for Massachusetts communities.”
Some student loan servicers have taken advantage of student borrowers by using illegal or unfair predatory lending methods, charging exorbitant fees, misrepresenting their products to students, botching paperwork, failing to properly process paperwork or misleading them into opting for more expensive options. According to the Consumer Financial Protection Bureau (CFPB), almost two-thirds of the complaints filed by student borrowers last year were related to problems with loan servicing.
The Student Loan Borrowers Bill of Rights will protect student borrowers by:
- Requiring the Division of Banks to license all student loan servicers, holding them accountable for deceptive practices under state law.
- Establishing a Student Loan Ombudsman office that will receive, review, and assist in resolving complaints. This office will be critical in spotting and evaluating unfair and deceptive trends and practices enabling regulators to end the practice and to protect borrowers.
- Allowing the Division of Banks to conduct investigations and examinations of student loan servicing practices.
Similar bills have been passed in California, Colorado, Connecticut, Illinois, New York, Washington state and Washington, D.C.
“Now more than ever, it is critical that we defend students from unscrupulous loan servicers, ” concluded Cummings. “The need for state oversight could not be more urgent.”