In recent years, the topic of student loans has been a hot item in the news. More Americans than ever before are saddled with student loan debt, and more borrowers are having difficulty paying off their loans. Bad debt collection practices and overly-aggressive student loan servicers have turned many borrowers’ lives upside down. Borrowers can feel as though no one is there to help them. Yet a new legislation in Virginia and other states could change that reality.
Student loan ombudsmen are government officials tasked with helping borrowers who are struggling with repaying their student loans. They can assist borrowers with their student loan problems in a number of ways, including protecting them from unfair debt collection practices and helping them understand their repayment options. A growing number of states have established their own ombudsman to help borrowers, offering a great way to assist as many people as possible.
What is the Virginia Student Loan Ombudsman?
The Virginia student loan ombudsman is a new position founded in 2018 in response to the large number of borrowers struggling with their student loan debt. Legislation to establish this office was proposed in early 2018. In March 2018, Gov. Ralph Northam signed the bill into law.
The student loan ombudsman is intended to work as an advocate for borrowers. The ombudsman will help borrowers with their repayments by renegotiating their loan terms, asking servicers to delay payments, and helping borrowers get into careers where student loan forgiveness is an option, such as public service careers.
Virginia is one of at least five states that have specific protections for student loan borrowers. California has special licensing for student loan servicers, and tighter regulation of the industry. Washington has a student loan “bill of rights,” which calls for both an advocate for borrowers and licensing of student loan servicers.
Connecticut, Illinois, and Washington, D.C., each have similar laws. The federal government also offers assistance through the Consumer Financial Protection Bureau (CFPB). Through the CFPB, borrowers can file complaints about their student loan servicers and lenders; the CFPB will then work to resolve those complaints.
Has the Virginia Student Loan Ombudsman Been in the News Recently?
Virginia’s student loan ombudsman was only recently established and is just getting started in its role to help student loan borrowers “understand their rights and responsibilities.” While the ombudsman has not been in the news recently, onlookers anticipate the ombudsman may make news as it investigates complaints about student loans servicers and lenders. The ombudsman will also help steer borrowers toward repayment plans and careers that could help them repay their student loans.
While an ombudsman will not change the rising cost of college in Virginia or elsewhere in the United States, these government officials can help protect people who have existing student loan debt. This can assist in leveling the playing field as massive student loan corporations often have the upper hand in relationships with borrowers.