Boston – On April 11, Senator Mike Barrett (D-Lexington) joined his 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, ‘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 loan 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. The Ombudsman will lead efforts to respond to complaints from student loan borrowers and help them understand their rights.
“Students working towards a college degree are facing unprecedented levels of student loan debt,” said Barrett. “While President Trump and Education Secretary Betsy DeVos continue to stand on the side of the large for-profit student loan servicers, it is more important than ever that here in Massachusetts we protect our students from deceptive practices and misleading advice.”
“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 engaged in abusive practices such as overcharging students or steering them into costlier repayment plans to make higher profits. Servicers that break state licensing requirements or take advantage of students could be fined and forced to repay student borrowers.
The bill now goes to the House of Representatives, where Representative Natalie Higgins (D-Leominster) is the lead sponsor of the House companion bill.