Va. Senate unanimously endorsed the Borrowers’ Bill of Rights & Student Loan Ombudsman
Richmond, VA—Ahead of the crossover deadline this evening, the Virginia House and Senate advanced an important legislative package tackling the student debt crisis with bipartisan support. The bills would create a state student loan ombudsman to help borrowers navigate complicated repayment options as well as establish a state Borrowers’ Bill of Rights and license student loan servicers through the Bureau of Financial Institutions.
SB362 and SB394, patroned by Senator Janet Howell, both passed the State Senate unanimously. HB1138, the House version of the ombudsman proposal carried by Delegate Marcia Price, passed the House 94-5. Both proposals have been a priority for Governor Ralph Northam and were one of the only legislative items discussed in his January speech to a joint session of the General Assembly to receive a bipartisan standing ovation. HB967 (Simon), the House Borrowers’ Bill of Rights, was passed by indefinitely in House Commerce & Labor Subcommittee #3.
“With over one million Virginia student loan borrowers who collectively have over $35 billion in student loan debt, solutions to this growing crisis are simply bipartisan commonsense,” said Progress Virginia executive director Anna Scholl. “Virginians owe more on student loans than we do on credit cards or car loans but only student loans lack consumer protections. Student loan borrowers should be treated just like everyone else and afforded basic protections to ensure the cost of education doesn’t ruin their financial future.”
Predatory servicing practices don’t just hurt the borrower. Outstanding student debt has exploded in recent years and is having an increasing adverse impact on the economy. When borrowers fall behind on their payments, default, or see their loan balance grow through deceptive practices, their economic purchasing power decreases, impacting our local economy. Numerous lawsuits against student loan servicers like Navient allege companies steamroll borrowers into forebearance rather than helping them navigate their options to stay in repayment, damaging borrowers’ financial futures.
Currently the Bureau of Financial Institutions licenses and oversees 12 types of financial service businesses, including banks, check cashers, consumer finance companies, credit counseling agencies, credit union, money transmitters, mortgage lenders & brokers, mortgage loan originators, motor vehicle title lenders, payday lenders, savings institutions, and trust companies.