BOSTON – Senator Michael O. Moore (D-Millbury) announced that the Senate recently voted to pass the “Student Loan Bill of Rights,” giving greater protections to student loan borrowers in disputes with companies servicing their loans.
The bill requires student loan servicers to be licensed companies with the state Division of Banks, and empowers state officials to investigate the 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, who will lead efforts by responding to complaints from student loan borrowers, and helping them understand their rights.
“As a legislator, parent and former college student, I was proud to support this important piece of legislation to help protect student borrowers from predatory student loan servicers” said Senator Moore, who serves as Senate Chair of the Joint Committee on Higher Education. “The bill offers a multi-layered approach to giving students the tools and support they need, while also providing the protection they deserve.”
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 is engaged in abusive practices such as overcharging students or steering them into costlier repayment plans to make higher profits.
Student loan servicers that break state licensing requirements or take advantage of students could be fined and forced to repay student borrowers under the bill.
The bill, S.2380, now goes to the State House of Representatives for consideration. To continue tracking the legislation, please visit the Legislature’s website, www.malegislature.gov.