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‘Student Loan Bill Of Rights’ Passes Committee

on February 12, 2019 - 9:57am
House Democrats News: News:
SANTA FE Monday, the House Commerce and Economic Development Committee passed a bill to enact a “Student Loan Bill of Rights” to protect student loan borrowers from exploitation.
House Bill 172, sponsored by Rep. Patricia Roybal Caballero (D-Albuquerque) and Rep. Dayan Hochman-Vigil (D-Albuquerque), requires student loan servicers to register and obtain a state license.
“This legislation cracks down on student loan service providers that prey on students. For many New Mexicans, student loan debt can hold them back from fulfilling their financial goals. And, if they default, they will face repercussions for years to come – when attempting to buy a car, get a mortgage, or even apply for a job” Rep. Patricia Roybal Caballero said. “We must ensure students have the opportunity to seek a higher education and repay their loans responsibly.”
The most recently released student loan default rate data from the U.S. Department of Education, indicates that New Mexico has the second highest default rate in the country at 16.2%.
“The cost of higher education has continued to rise, forcing more students to take out student loans to afford their education. But some student loan service providers have taken advantage of this need by misleading student borrowers and charging exorbitant interest rates. This legislation establishes much-needed transparency to protect our student borrowers,” Rep. Dayan Hochman-Vigil said.
Student loan servicing companies are largely unregulated and unlicensed by the federal government, leaving regulation and enforcement up to states. This bill seeks to prevent these companies from defrauding or misleading student loan borrowers, engaging in unfair or deceptive practices, or misapplying or recklessly applying student education loan payments.
House Bill 172 would establish licensing requirements, fees and penalties, and create the office of Student Loan Ombudsman. The ombudsman will be responsible for taking and investigating complaints from borrowers, providing information to the public about services, and tracking and disseminating statistics about student loans.
House Bill 172 now heads to the House Judiciary Committee.