Can be a student loan bill of Rights coming into California?
Here’s what you will need to know.
Student Borrower Bill of Rights
In case the California Senate passes the bill before this September, California Governor Gavin Newsom could sign the laws before year end.
“Multiple investigations Have revealed that loan servicers regularly eliminate paperwork, misapply payments, provide borrowers inaccurate info, and even steer them into more costly repayment options with virtually no accountability,” said Suzanne Martindale, senior policy counsel and western nations legislative director for Consumer Reports, that co-sponsored the laws. “In a period when the U.S. Department of Education has refused to set loan servicing standards to help borrowers, it’s crucial for countries like California to direct the way and deal with those longstanding abuses.”
Student Loans: Protections
While student loan Servicers cannot engage in deceptive or unfair business practices, the bill would set minimum industry standards for many student loan servicers, strengthen consumer protections and boost oversight.
Specifically, the bill would:
· Ban “violent” student loan servicing clinics regarding student loan repayment;
· Create minimal loan servicing standards that ensure student loan payments are applied properly, debtor’s student loan records are maintained accurately and student loan servicer staff members are trained to provide accurate information regarding student loan repayment choices.
· Establish a Student Loan Advocate (like the student loan urge role at the Consumer Financial Protection Bureau) to critique borrower complaints and inform the state legislature; and
· Grant that the Department of Business Oversight Further “market observation” authorities to aggregate data about the student loan servicing industry.