Student Loan Borrower Bill of Rights Act of 2020
Introduced: March 3, 2020
Co-introducers: Councilmembers Anita Bonds, Robert White, Elissa Silverman, Brianne Nadeau and Mary Cheh
Summary: To amend the Department of Insurance and Securities Regulation Establishment Act of 1996 to prevent abusive acts or practices on the part of student loan servicers, to clarify that student loan servicers under contract with the United States Department of Education shall automatically be issued a limited student loan servicing license upon meeting certain criteria; to clarify denials of applications for approval; to proscribe prohibited conduct on the part of student loan servicers; to assign affirmative duties to student loan servicers; to assign the Attorney General of the District of Columbia the power to enforce the Act; to transfer the Student Loan Ombudsperson from the Department of Insurance, Securities and Banking to the Office of the Attorney General for the District of Columbia; and require the creation of a Student Loan Borrower Bill of Rights by October 1, 2021.
Councilmember Grosso's Introduction Statement:
Thank you Mr. Chairman.
Today, along with Councilmembers Bonds, Cheh, Nadeau, and Silverman, I am introducing the Student Loan Borrower Bill of Rights Amendment Act of 2020.
As we all know, having a college education is an important requirement for entry into many jobs and professions with students and their families assuming a financial burden in exchange for a successful future.
To ease the burden, student loans make college accessible to students coming from all income levels, allowing them to pursue their educational endeavors—but at a cost.
On average, repayment rates often negatively affect first-generation college students, along with Black and Latinx students who are more likely to fall behind on loan payments and are less likely to pay off their student loans over time.
Student loan debt is at a crisis level with an estimated 1.5 trillion dollars owed in student loan debt nationally.
In the District of Columbia, the average student loan balance is approximately $56,000 while the national rate for the average student loan balance is approximately $37,000.
The Student Loan Borrower Bill of Rights Amendment Act of 2020 will ensure that student loan borrowers in the District of Columbia are protected from abusive acts or practices on the part of lenders.
This bill establishes protections including a Student Loans Bill of Rights and providing borrowers with affirmative protections when submitting written inquiries to their servicers, when splitting single payments across multiple loans, and when their loans are sold or transferred to another servicer.
D.C. Law already prohibits debt collectors, auto lenders, and other loan-based companies from misleading or causing harm to borrowers, and with this bill in place, student loans lenders would be no different.
The proposed bill would also move the Student Loan Ombudsperson from the Department of Insurance, Securities and Banking to the Office of the Attorney General to streamline the complaint referral process when enforcement action is needed while also capitalizing on the existing subject matter expertise of OAG staff.
The Student Loan Ombudsperson assists with the regulation of student loan services, conducts important outreach to assist D.C. residents who are preparing for college and who have already acquired student loan debt.
Finally, this bill provides for a private right of action when borrowers believe they have been victims of abusive acts and violations of the law on the part of student loan servicers.
Pursuing an education using the financial help of a loan provider should not be coupled with the fear that one will not be able to pay or be disadvantaged in the payment process.
I would like to thank the Student Borrower Protection Center for their continued advocacy and partnership with my office on this and many other initiatives to protect D.C.’s student loan borrowers.
Thank you, and I welcome any co-sponsors.