BOSTON — On April 11, Senator Cindy Friedman (D-Arlington) joined her Senate colleagues in voting to pass the “Student Loan Bill of Rights,” giving greater protections to student loan borrowers in disputes with companies servicing their loans.
The bill, S.2380, An Act establishing a student loan bill of rights, requires student loan servicers to be licensed companies with the state Division of Banks, and empowers state officials to investigate the servicers and take action against those that violate the state’s banking and consumer protection laws.
The bill also supports the ongoing work of Attorney General Maura Healey’s Student Loan Assistance Unit by establishing a Student Loan Ombudsman in the Attorney General’s Office, who will lead efforts respond to complaints from student loan borrowers and help them understand their rights.
“Students pursuing a higher education degree are experiencing a debt crisis as a result of steadily rising tuition costs at our colleges and universities,” said Senator Friedman. “The crisis has impacted many young people in our state and as a result, they are being taken advantage of and falsely led into costly repayment plans by student loan companies. This bill entitles our students to appropriate consumer protections, provides them with the tools and resources they need, and ensures that predatory student loan servicers are kept in check through proper oversight.”
“Taking on abuses in the student loan industry has long been a priority of my office. That’s why, in 2015, we created a Student Loan Assistance Unit to help borrowers with their student loans,” said Attorney General Maura Healey. “I thank Senate President Chandler, Senator Lesser and the Senate for providing new resources and tools to protect Massachusetts students and families.”
Under the bill, student loan servicers would have to apply for licenses from the state, which the Commissioner of Banks could revoke if the servicer is engaged in abusive practices such as overcharging students or steering them into costlier repayment plans to make higher profits.
Student loan servicers that break state licensing requirements or take advantage of students could be fined and forced to repay student borrowers under the bill.
To continue tracking the bill, visit www.malegislature.gov.