Legislators hope to arm students with good information before they get in trouble repaying their student loans.
HF3063 is the next step in addressing what Rep. Zack Stephenson (DFL-Coon Rapids) terms a student loan crisis. His bill would create a student loan advocate and education course to be a clearinghouse of trusted information.
It follows the Student Loan Borrower’s Bill of Rights passed last year, which included a number of provisions aiming to protect borrowers, including a licensing requirement for student loan servicers.
“Last year we adopted the very important student borrower’s bill of rights,” Stephenson said. “Now we have to make sure we’re educating students about their rights, but also making sure they’re not getting into trouble in the first place.”
The bill was laid over Wednesday by the House Commerce Finance and Policy Committee for possible omnibus bill inclusion. It has no Senate companion.
It calls for a student loan advocate within the Commerce Department and would require the department to build an educational course about student loans and take it on the road to educational institutions. It would also give the Commerce Department more enforcement firepower.
The bill’s goal, Stephenson said, is to help borrowers understand what happens in the long run if they take on student debt.
“Because we don’t want people taking on debt under false pretenses about what’s going to happen after the fact,” he said.
About 900,000 Minnesotans have student debt, with an average of $37,000 for each borrower, said Ryan Fiereck, vice president of Education Minnesota. He said fear of student debt is driving people away from becoming teachers.
“Especially right now, we cannot afford to lose people who might go into education because of issues that can be resolved through better education and advocacy,” Fiereck said.
He said potential borrowers need better information about loans and repayment options that they don’t get from loan servicers or college financial aid offices.
“We need education and support for borrowers before they become borrowers,” he said.