Analysis: House HEA Bill Attacks State Protections for Student Loan Borrowers
This post originally appeared on consumerfed.org
By: CFA Staff | December 12, 2017
Earlier this year, an analysis by the Consumer Federation of America found that 1.1 million Americans defaulted on a federal student loan in 2016. That’s one every 28 seconds. Like the breakdowns in the mortgage servicing industry seen during the foreclosure crisis that devastated the economy, we have seen similar problems in the student loan servicing industry.
State attorneys general are prosecuting bad actors that are cheating student loan borrowers. The Attorneys General of Illinois, Washington, and Pennsylvania, have joined the Consumer Financial Protection Bureau (CFPB) in suing the nation’s largest student loan company, Navient (formerly known as Sallie Mae), for violating the law.
It’s not just Illinois. States across the country are working to put into place new protections for student loan borrowers. (The Higher Ed, Not Debt campaign put together this map to track all of the activity.)
However, Congress is considering stripping the rights of states to protect borrowers from student loan servicing abuses. Tucked away on page 464 of a bill being considered this week is language that would nullify state laws related to student loan servicing and debt collection.
Keep reading here.
Posted on 12 December 2017