Are there state-specific protections in place to prevent student loan borrowers from abusive debt collection practices? The Fair Debt Collection Practices Act (FDCPA) provides protections at the federal level, but according to a recent article in Consumer Affairs, Illinois Attorney General Lisa Madigan is supporting a bill that is designed to provide specific consumer protections in the state of Illinois. More specifically, the proposed legislation, Senate Bill 1351, is designed to “create a Student Loan Bill of Rights to protect borrowers from abuse.”
What protections would the bill provide on a more specific level, and what else needs to happen for it to become law?
Bill Passes in the Senate
As the article explains, SB 1351 has already passed in the Illinois Senate by a 34 to 15 vote. It is now time for the bill to be considered by the Illinois House of Representatives. Attorney General Madigan’s office drafted the bill along with Senator Daniel Biss. Representative Will Guzzardi will sponsor the bill in the House.
Why is this law so important? In other words, what does Senate Bill 1351 aim to do that federal law does not already do? As Madigan explained, the proposed legislation is largely in response to a lack of specific protections for student loan borrowers under federal law. While the FDCPA is in effect, it is not designed precisely with student lending practices in mind. Madigan clarified: “This bill is critically important now that the U.S. Department of Education has abandoned student loan borrowers by revoking reforms to prevent the abuses uncovered in my investigation . . . . These commonsense measures will prove the financial futures of student loan borrowers, their families and our economic.”
Madigan’s comments refer to the “roll back” of federal protections for student loan borrowers at a time when student lending abuses seem particularly salient, and when student loan debt now totals in the trillions of dollars. Madigan’s office has consistently received complaints from Illinois consumers about student lending practices. For instance, borrowers have complained that loan servicers have not provided affordable payment options, have not provided clear instructions concerning payments, and have not consistently answered questions about loans.
Specific Protections for Student Loan Borrowers in SB 1351
What specific protections are contained in the Student Loan Bills of Rights? Borrowers in Illinois would be able to expect the following:
- Payments would have to be processed properly by the loan servicer;
- Loan servicers would have to provide specialists to explains repayment options to borrowers, including information about income-driven repayment plans; and
- Loan servicers would have to inform borrowers about whether they may be eligible for loan forgiveness due to disability or another reason;
- Illinois Attorney General’s office would create a Student Loan Ombudsman; and
- Loan servicers would need to obtain a license in order to operate in Illinois.
The next step, in order for the bill to move forward, requires that it pass in the House. If it passes, it will be sent to the governor for approval. If the governor approves the bill, then it can be signed into law.
Contact an Oak Park Consumer Protection Attorney
Do you have questions about your rights as a student loan borrower? Or do you have concerns about whether your rights have been violated? An experienced consumer protection attorney in Oak Park can assist you. Contact the Emerson Law Firm for more information.
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