Illinois Attorney General Lisa Madigan, a staunch defender of student borrower rights, talks to an attentive audience.
Illinois Attorney General Lisa Madigan held a student loan forum yesterday, August 14th, while also pushing Illinois Governor Bruce Rauner to sign into law the Student Loan Bill of Rights, according to a press release issued by the attorney general’s office.
Madigan, a staunch defender of student loan borrowers, invited education advocates and community organizers to the student loan forum. It was there that Governor Rauner was encouraged to sign a bill that would reform the student loan industry in order to ease the burden of repayment on borrowers.
The bill, Senate Bill 1351, is being dubbed the Student Loan Bill of Rights and was crafted after a Madigan-led investigation and subsequent lawsuit against Navient revealed widespread abuses and failures in the student loan industry.
Senate Bill 1351 was sponsored by Senator Daniel Bliss and Representative Will Guzzardi, while the language was formulated by Attorney General Madigan’s office.
The Student Loan Bill of Rights would require that student loan servicers process loan payments properly and correctly, while also requiring the servicers to hire specialists that can explain to borrowers all of the repayment options available to them. Additionally, the bill would require student loan servicers to inform borrowers when they may be eligible to have their educational loans forgiven due to illness or other problems.
Further, the Student Loan Bill of Rights would create a Student Loan Ombudsman and would make it mandatory for servicers to obtain a license to do business in Illinois. The Ombudsman would be within the attorney general’s office.
Attorney General Madigan released the following statement: “For too long, student loan borrowers have been put into more difficult and more expensive repayment plans because of fraudulent practices by student loan companies. The Student Loan Bill of Rights will finally crack down on abuse and make Illinois a national leader in protecting borrowers. The Governor should sign this bill into law immediately on behalf of Illinois students, families and our economy.”
Upon investigating Navient, one of the largest student loan companies in the U.S., Madigan found that student loan borrowers are constantly put into difficult situations with their student loan servicers. This includes getting led into a more expensive repayment option, not understanding repayment instructions, and not getting questions answered by the student loan servicer’s customer support staff.
Just last week, Navient lost two separate dismissal motions regarding two different lawsuits that were filed against the student loan servicer. Those lawsuits both alleged that Navient was mistreating hundreds of thousands of student loan borrowers by taking shortcuts to reduce expenses.
The difficulty that arises from dealing with student loan companies and servicers leads to many student loan borrowers becoming vulnerable to student loan scams. The Student Loan Report has covered student loan scam operations extensively. For example, last Friday it was reported that a North Carolina man’s cell phone number was hacked by scammers who were promising to relieve student loan borrowers for an upfront fee.
Attorney General Madigan has become quite the champion when it comes to student loans and the borrowers that struggle to repay their educational loans. For example, the Illinois Attorney General strongly urged the Department of Education to administer more financial aid, in addition to providing more assistance to the near 7,000 students that have been negatively impacted by for-profit colleges.
Student loan borrowers could use all the help they can get and would benefit from extra protections. According to The Student Loan Report, the total student loan debt in the U.S. is $1.41 trillion, while the average borrower owes $27,857 in student loans.
Image Copyright © Kelsey McCoy