Lawmakers Push to Impose Stricter Regulations on Student Loan Servicers
From car-title loans to student debt, lawmakers are hoping this will be the year when the General Assembly takes on predatory lenders.
Katlyn Weiser will never forget the day her student loan servicing company told her maybe she should drop out of school and work full time to pay off some of her student debt.
“I cried," she says. "I cried a lot because I had come so far. I had been the first person in my family to go to college, one of the few people in my high school to go to college, and it was sad to hear that because I had come so far.”
Now, Weiser did not listen to that advice. She didn’t drop out and now she’s a senior at George Mason University. She’s one of the student borrowers Senator Janet Howell wants to help with a bill she calls the Borrowers Bill of Rights. It would use the power of the State Corporation Commission to crack down on what she calls the egregious practices of student loan servicing companies.
“Now we can’t change the federal bankruptcy laws," Howell explains. "But we can regulate these student loan servicers to ensure we’re protecting our borrowers from shady practices, and believe me there are shady practices.”
Now, Howell has introduced similar legislation in the past, and it’s been approved with bipartisan votes in the Senate. But it’s always been stalled in the House. Now that Democrats are in power, though, things might be different this year.