As the new year kicks into gear, new developments in the student loan arena have become law. Several states are fighting back against student loan servicers or purposely making life hard. We’ve covered stories over the past few days of servicers who were dishonest with borrowers. This led to many people lucking out of benefits they desperately needed.
The government seems to be slowly but surely waking up to the realization that people are suffering. For-profit schools and loan servicers are making a killing. They’re doing it by lying and cheating the system. While the federal government is still behind, many states have taken a step forward in implementing a new plan.
California, Washington, and Illinois all implemented and signed new laws. Other states, like New Mexico and Virginia, are currently introducing new legislation. All these states are jumping on the bandwagon to regulate student loan servicers to prevent their corruption. Must take a look at what each state is doing to help student loan borrowers.
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A lot of California’s work involves oversight. Their Department of Business Oversight published a student loan servicing report. This report reveals how licensees are to report to the Commissioner by March 15. With this report, every student loan servicer will share their profile. Each year a new report arrives on December 31.
Illinois is requiring a student loan servicer to provide access to a website that handles communications. Someone has a question about new or existing loan applications, they can answer honestly. The regulations also state that each servicer must provide detailed information through a secure system. Therefore, providing needed oversight.
By providing oversight and detailing personal records, forces servicers to be honest. Allows borrowers to log and then see their application, complete loan history, and so much more. It also provides borrowers with instructions on how to handle things like overpayments. This is just the beginning of keeping student loan servicers honest.
Washington state introduced a new law that went into effect at the start of the year. This new law backs up the Consumer Loan Act which was passed last year. It requires student loan servicers to report any and all changes. It also provides a point of contact regarding student loan forgiveness options. Still, there’s a lot more work to be done!
In reality, these new laws are holding student loan servicer’s feet to the fire. It’s giving borrowers the information they need to make better decisions regarding their student loans. Servicers must follow state and federal law.
Midterm Elections Impact Student Loan Laws
2018 midterm elections saw a shift to many governorships and state legislators turning to Democratic control. With this being the case, it’s expected that more laws and protections regarding student loans will be put into effect over the next few years. More oversight and honest reporting is required to help keep people safe. Still, not much is likely to happen on the federal level. We’ll keep you up to date on any new revelations!