Illinois Governor Vetoes Student Loan Bill of Rights

Attorney General Lisa Madigan’s Office drafted the Illinois Student Loan Bill of Rights (SB 1351), which was sponsored by Sen. Daniel Biss and Rep. Will Guzzardi. We discussed the legislation with you back in May when the proposed legislation went through the Illinois state legislature. The bill was designed to prevent unfair debt collection practices and abusive loan collection tactics. However, according to a recent press release from Madigan’s office, Illinois Governor Bruce Rauner has vetoed the bill. What does the Attorney General’s office have to say about this? What does the veto mean for student loan borrowers in Oak Park and throughout Chicagoland?
Reasons for the Student Loan Bill of Rights
As many Illinois residents know, debtors across the state are struggling with student loan payments. The press release highlights that student loan debt represents “the largest form of unsecured debt in the country.” Currently, there are more than 40 million borrowers total, and they owe collectively more than $1.4 trillion. The average student debt for about 70% of borrowers upon leaving school is $30,000. Of all the borrowers out there, approximately 25% are either “behind on their payments or in default.”
The student debt problem is particularly troublesome when it comes to underwater student loans, deceptive student lending practices, and student loan debt owed for attending for-profit colleges. Madigan’s office explains that the majority of student loan borrowers who are currently in default attended for-profit colleges. While many of those borrowers had above-board loans (including federal student loans), a lot of borrowers do not know that they can enroll in income-based repayment plans. Currently only about 20% of borrowers who are eligible for these plans do not take advantage of them.
Madigan also drafted the Illinois Student Loan Bill of Rights to help struggling debtors understand their rights when it comes to student loan servicers. Many borrowers have submitted complaints to the Attorney General’s office about servicers, including that they fail to answer questions consistently, fail to follow instructions from the borrowers, and fail to provide information about affordable repayment plans. As a reminder, here is what the Bill of Rights would have required of loan servicers:
  • Process payments properly;
  • Provide information about all repayment options, including income-driven plans; and
  • Inform borrowers about options for loan forgiveness.
Why Did Governor Rauner Veto the Bill?
We do not know precisely why Governor Rauner vetoed the bill. What we do know, however, is Madigan’s response. In response to Rauner vetoing the Illinois Student Loan Bill of Rights, Madigan has suggested that the General Assembly should override the veto and put these protections into place for student loan borrowers. She also had this to say:
“Today Gov. Rauner failed to stand up for struggling student loan borrowers, their families, and our state’s economy. His veto of the Student Loan Bill of Rights shows he doesn’t care about the financial reality that student loan borrowers face and has instead sided with large corporations that put their profits before their customers.”
That the bill has been vetoed does not mean that Illinois will not be able to put protections in place for student borrowers. In the meantime, however, if you have questions about your rights, an experienced Oak Park consumer protection lawyer can help you. Contact the Emerson Law Firm today to speak with an advocate.
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