Improving consumer protections for federal and private student loans to help ease student loan debt is the aim of an amendment to the Economic Growth, Regulatory Relief and Consumer Protection Act introduced March 8 by Illinois Senator Dick Durbin. It includes a Student Loan Borrower Bill of Rights as well as some bankruptcy protections.
In a speech on the Senate floor, Durbin said, “For many Americans today, there’s no bigger drag on their families than student loan debt. Unlike most of us, who could borrow a reasonable amount to finance our college education, this generation of college graduates starts off with an average debt of $27,000 on day one after graduation. Many have much, much more, especially if they were duped by this notorious for-profit college industry in America.”
The amendment — also sponsored by five other Democrats — would do the following:
- Establish disclosure requirements and protections for borrowers when a student loan is sold, transferred or reassigned.
- Require services to respond in a timely manner to inquiries and provide online access to information related to borrowers’ loans.
- Ensure private education loans are dismissed when borrowers die or become disabled.
- Clarify the “undue hardship” exception to non-dischargeability in bankruptcy — so those receiving Social Security disability benefits; acting as caregivers for veterans, elderly or chronically ill family members; or making less than 200 percent of the poverty guidelines are eligible to have their loans dismissed.
“Banks fought hard more than a decade ago to exempt student loan debt from bankruptcy protections, and now we’ve seen the consequences too: too many students are crushed by debt with no chance for a new start,” said Massachusetts Senator Elizabeth Warren, one of the amendments sponsors. “Senator Durbin’s bill will restore this basic safeguard.”
Are you interested in learning how this amendment could affect your student loan status? Schedule your free initial consultation with San Diego Student Loan Lawyer today.