More than a million Virginians are saddled with student loan debt, and a lot of them have to deal with sketchy student loan servicers that have a history of scamming borrowers. Check this–– nowadays these companies are not subject to the same rules and oversight that exist for other financial service providers, like credit cards and mortgages, in Virginia. But all that is about to change.
Student loan servicers are about to get a SERIOUS reality check because on July 1, the Borrowers’ Bill of Rights (BBOR) will become law to protect student loan borrowers from predatory companies that profit off people with student loan debt! The BBOR extends basic consumer protections to borrowers while requiring loan servicers to give borrowers accurate information about their loans, apply payments properly, and report accurate payment information to credit bureaus. That is what I call W-I-N-N-I-N-G.
The Borrowers’ Bill of Rights Is to the Rescue!
I’m a single mom who has to work two jobs (one full-time and the other part-time) to keep food on the table while paying my mortgage, my bills, and that PESKY STUDENT LOAN. I already paid off my undergraduate student loans, and I’m within a couple of years of finishing the payments on my grad school loans. But I’ve spent most of my adult life paying off student loans. SHEESH.
That seems like a lot, but my situation isn’t that bad compared to a lot of people––especially Black students who have to borrow a lot of money to afford college. I was able to borrow from the federal government, keep my interest rates low without having to borrow from a private lender, and was fortunate to stay financially stable enough to keep up with my payments. And this is mostly because I’m a privileged white person who exists in a system designed to benefit me.
Other people can’t take out federal loans and resort to borrowing from private lenders with high interest rates and sketchy business practices. People like my friend Alex, whose student loan debt is crushing her. She is a Newport News resident, who works two jobs and puts in over 60 hours a week in order to make her $1,300 monthly student loan payments. It is a struggle to keep up with those huge payments.
Alex graduated from college with $100,000 in student loan debt. She got married, but decided with her husband to postpone starting a family until both of their student loans were paid off. At first, her loan payments were manageable at around $800 a month. Then Navient, her loan servicer, told her a new loan had appeared and she owed an extra $20,000.
Alex didn’t remember taking out that loan. She asked her parents about it–-they didn’t have any idea about the loan, either. Alex called Navient and asked for the original documents for the loan to prove that it existed.
Navient refused to give Alex the loan information she requested to understand where the new debt came from. So, she was stuck with making the payments. And get this––Navient said that an additional $20,000 accrued in interest during the time she wasn’t making payments (on a loan she didn’t know existed). So, Alex owed double on a loan she couldn’t confirm existed in the first place. Her monthly student loan bill skyrocketed from $800 to $1,300 a month.
Holding Navient Accountable with a Borrowers’ Bill of Rights
A lot of student loan borrowers are dealing with sketchy loan servicers like Navient, which is being sued by attorneys general from different states for deceptive business practices. Companies like Navient are eager to profit off student loan debt by misleading borrowers and telling them they owe more than they really do, providing false information, and suggesting the most expensive options for loan repayment.
I’m grateful for my education and the opportunities it gave me. I’m also grateful that the Virginia General Assembly stepped up and passed the Borrowers’ Bill of Rights! This is a bill my colleagues and I at Progress Virginia worked on getting passed for many years. We’re happy that voters in the Commonwealth elected a progressive majority in 2019 so that student loan borrowers could get protections. Now we need you to vote again, so we can keep building on this progress to do even more. Make sure you’re registered to vote, and sign up for our email list to stay up to date on all the progressive happenings in Virginia!