Community

Grosso Introduces Bill to Strengthen Protections for Student Loan Borrowers

The student loan burden in America sits at nearly $1.6 trillion and continues to rise, according to a January report from the credit rating agency Moody’s Investors Service.

Much of that debt has resulted from the inability of borrowers to make any sort of headway in paying down their loans, according to the report.

Student loan debt is no longer considered a problem, it’s a crisis.

This month, D.C. Councilman David Grosso introduced legislation that seeks to protect borrowers from abusive practices by lenders and to improve the work of the District’s student loan ombudsperson.

The Student Loan Borrower Bill of Rights Amendment Act of 2020 establishes a Student Loan Bill of Rights that provides 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.

It also prohibits unfair, deceptive, or abusive acts and practices by student loan lenders.

“A college education is an important requirement for entry into many jobs and professions, and student loans make college accessible to students from all income levels – but at a cost,” Grosso said in a news release. “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. D.C. needs to act to ensure our residents who carry student loan debt are protected.”

The average student loan balance in the District is approximately $56,000, while the national rate for the average student borrower nationally is about $37,000 of student debt.

Due to the gradual increase in school tuition rates, the rise of student loan borrowers is also set to increase, leaving vulnerable populations susceptible to these lenders, Grosso noted.

“Because the District of Columbia already prohibits debt collectors, auto lenders, and other loan-based companies from misleading or causing harm to borrowers, this bill would hold student loans lenders accountable to the same standards,” he said.

The councilman also noted that it’s his hope to improve the effectiveness of the District’s Student Loan Ombudsperson by moving it from the Department of Insurance, Securities and Banking to the Office of the Attorney General.

“The Attorney General’s office has been providing many of the same functions of the student loan ombudsperson, including handling complaints, creating and distributing student loan repayment resources, and engaging in community outreach,” Grosso said. “Moving the student loan ombudsperson to the A.G.’s office would streamline the complaint referral process when enforcement action is needed while also capitalizing on the existing subject matter expertise of the staff.”

In a statement, Attorney General Karl A. Racine said he agreed with Grosso.

“Nearly a quarter of District residents are under the strain of student loan debt, with a median balance that is 44 percent higher than the national average,” Racine wrote in his statement. “Former students struggling to pay off their debt are acutely vulnerable to predatory student loan servicers that make it harder to access debt repayment options – and drive too many residents, especially those in communities East of the River, into delinquency.

“The Office of the Attorney General strongly supports Council member Grosso’s proposal to strengthen protections for student borrowers, and we take this opportunity to remind debt collectors and servicers that our lawyers are ready to defend residents against unlawful practices,” he wrote.

The Student Borrower Protection Center, the nonprofit organization, focused on alleviating the burden of student debt for millions of Americans, also endorsed the legislation.

“The District of Columbia is ground zero in the student loan crisis,” Seth Frotman, the organization’s executive director and former Consumer Financial Protection Bureau student loan ombudsman, said in a release. “From breakdowns that deny teachers and public service workers their right to relief, to the enormous disparities devastating borrowers of color, predatory student loan companies are wreaking havoc on the financial lives of some of the most vulnerable residents.”

“As the Trump administration chooses to stand with unscrupulous student loan companies, it is more important than ever that the District pass critical new protections for its residents,” Frotman said.

Tags
Show More

Stacy M. Brown

I’ve worked for the Daily News of Los Angeles, the L.A. Times, Gannet and the Times-Tribune and have contributed to the Pocono Record, the New York Post and the New York Times. Television news opportunities have included: NBC, MSNBC, Scarborough Country, the Abrams Report, Today, Good Morning America, NBC Nightly News, Imus in the Morning and Anderson Cooper 360. Radio programs like the Wendy Williams Experience, Tom Joyner Morning Show and the Howard Stern Show have also provided me the chance to share my views.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *


By submitting this form, you are consenting to receive marketing emails from: Washington Informer Newspaper, 3117 Martin Luther King Jr. Ave SE, Washington, DC, 20032, http://www.washingtoninformer.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Back to top button

My News Matters to me - Washington Informer Donations

Be a Part of The Washington Informer Legacy

A donation of your choice empowers our journalists to continue the work to better inform, educate and empower you through technology and resources that you use.

Click Here Today to Support Black Press and be a part of the Legacy!

Subscribe today for free and be the first to have news and information delivered directly to your inbox.


By submitting this form, you are consenting to receive marketing emails from: Washington Informer Newspaper, 3117 Martin Luther King Jr. Ave SE, Washington, DC, 20032, http://www.washingtoninformer.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker