Can be a student
loan bill of Rights coming into California?
Here's what you
will need to know.
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.
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."
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.
“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.