Rhode Island General Treasurer Seth Magaziner today joined Governor Gina Raimondo and Attorney General Peter Neronha for a ceremonial bill signing of the Student Loan Bill of Rights, which protects Rhode Islanders through new consumer protections and oversight of student loan servicing practices.
"We've worked hard to reduce the cost of college for Rhode Islanders. We also need to ensure that those who graduate with debt are treated fairly by lenders," said Governor Raimondo. "The Student Loan Bill of Rights safeguards students by creating clear, strict, and transparent regulations for loan agencies, and it ensures that loan agencies are held accountable for their actions."
Borrowers in Rhode Island report being double-charged or incorrectly marked as delinquent in payment, with loan servicers taking months, or ever years, to correct mistakes. Borrowers are also being pushed into repayment schemes that are in the best financial interest of the loan servicer - without regard for whether it is in the best interest of the borrower.
"Too many Rhode Islanders who have invested in their education are affected by negligent or deceptive practices by student loan debt servicers," said General Treasurer Seth Magaziner. "This law sets standards for the industry to ensure that student loan borrowers in Rhode Island are treated fairly. It also gives the State tools to investigate borrower complaints and to hold servicers accountable for their actions."
The law requires that student loan servicers register with the State, allows state regulators to examine servicers' business practices, and empowers the Attorney General to mediate complaints on behalf of borrowers and enforce violations of the law under the Deceptive Trade Practices Act, the state's primary consumer protection law.
"Rhode Islanders who took out student loans to pay for college should be protected from loan servicers that put profits ahead of helping people navigate the complicated system," said Attorney General Neronha. "We developed this Student Loan Bill of Rights to create new protections for borrowers and allow the Attorney General to enforce them. My Consumer Protection team will be on the front lines, educating borrowers about their new rights as well as how to submit complaints so our Office can get borrowers the help they need and hold loan servicers accountable."
The Student Loan Bill of Rights was sponsored by Senator Dawn Euer (D- Dist. 13, Jamestown, Newport) and Representative Joseph McNamara (D-Dist. 19, Warwick, Cranston), with support from Brenda Dann-Messier, Commissioner of Postsecondary Education, and Liz Tanner, Director of the Department of Business Regulation.
"By several measures, student loan debt has increased greatly in the last 10 years," said Representative McNamara (D-Dist. 19, Warwick, Cranston), chairman of the House Committee on Health, Education and Welfare. "It has surpassed the amount households owe on auto loans, home equity loans and credit cards. This legislation will help to address the crisis by establishing oversight of the student loan process and prohibiting predatory practices."
"The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles," said Senator Euer. "Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers."
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