St. Paul, MN. – Today, a pair of bipartisan legislators announced efforts to provide important new protections for Minnesotans struggling with student debt. The Student Borrowers Bill of Rights legislation, authored by Rep. Zack Stephenson (DFL-Coon Rapids) and Sen. Zach Duckworth (R-Lakeville), would require licensure of student loan servicers, and establishes a variety of financial guardrails student loan servicers must follow to enhance consumer protections for student loan borrowers.
“Minnesota law is stunningly inadequate at protecting student borrowers from even the most basic bad behavior by the private companies that service their debt,” said Rep. Stephenson. “Our state’s students deserve transparency and less red tape, and our bill is designed to help ensure they aren’t misled or maltreated by student loan servicers.”
“Protecting young people from predatory lending and ensuring they have accurate information about their financing options is critical to their financial wellbeing and ability to fund their education,” said Senator Duckworth. “Folks shouldn’t be taken advantage of and their best interest should be at the forefront of any advice or guidance they receive related to student loans. Accepting a loan is serious and so is the commitment to repay it – equally serious is the commitment to ensuring the terms and servicing of that loan are fair and conducted in good faith.”
According to the Federal Reserve, the total amount of student loan debt has surpassed credit card debt to become the second largest class of debt in the U.S., with students owing a stunning $1.7 trillion dollars nationally. Sarah Rothers, a media specialist and social studies teacher at a Chaska middle school, shared personal testimony regarding the ongoing financial challenges her student loan debt continues to present for her family.
“I don’t want my daughter to associate financial stress and worry with a college degree,” said Ms. Rother. “Children should see education as a gateway to their future, not as shackles of insurmountable debt.”
Destiny Belmont, a school psychologist with the Benton-Stearns School District, also shared her experience with her student loan servicer changing her required payments multiple times over the course of ten years.
“Loan servicers are taking advantage of Minnesotans, many who like myself are going into education, health care and other public services,” said Ms. Belmont. “It’s time to regulate student loan servicers and represent the interest of borrowers, not corporations.”
The Student Borrowers Bill of Rights legislation will be introduced during today’s House floor session. The measure has been scheduled for a hearing tomorrow, February 23, in the House Higher Education Finance and Policy Committee at 3:00 p.m. The hearing will be livestreamed on House Public Information’s HTV1.