STUDENT LOAN BILL OF RIGHTS

By Bob Katzen

The Senate 36-0, approved a bill giving greater protections to borrowers in disputes with companies servicing their student loans.

Provisions include requiring that all student loan servicers be licensed by the Division of Banks; creating the position of Student Loan Ombudsman in the attorney general’s office; assisting in resolving complaints from students; allowing the Commissioner of Banks to revoke or refuse to renew a lender’s license if the company is engaged in abusive practices such as overcharging students or steering them into costlier repayment plans to make higher profits; and permitting the Commissioner of Banks to take enforcement action against companies that are violating any of these laws or regulations.

Supporters say that because of the high cost of college, students are taking on substantial debt, and are being taken advantage of by loan servicers.”

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