Student Loans

As the cost of financing our children’s higher education increases, the amount of student loan debt continues to rise at alarming rates. Students, upon graduating from college are often left with a mountain of debt and employment options that are simply insufficient to help make a real dent in the money they owe. Because of these loan payments, students are often prevented from becoming homeowners, saving money and building assets. Further contributing to this problem is the growing problem of aggressive and abusive student loan debt collectors.

Unfortunately, today our country’s student loan programs have become a substitute for rather than a complement to adequate public funding of higher education, including grants. Congress has essentially transferred much of the burden from the public to individual students. While it is generally acceptable for students to shoulder some financial responsibility, the problem is that the balance is now skewed so heavily toward students that it is crushing their futures. While schools may fail and even lenders may fail, borrowers are allowed very little margin for error.

In order for students to survive and thrive, a Student Borrower Bill of Rights can and must be passed by Congress. This Bill of Rights should:

• Limit the total monthly student loan payment amounts.
• Give borrowers greater flexibility to consolidate loans by repealing the single holder rule, ensuring that lenders allow borrowers to consolidate with the Direct Loan program in order to repay through income-contingent repayment plans, and to reconsolidate their loans in certain circumstances.
• Expand required disclosures about student loan repayment and other rights.
• Expand eligibility for disability discharges to borrowers who are unable to work because of medically determinable impairments that have lasted or are expected to last for a continuous five-year period.
• Restore the right of borrowers to discharge private student loans in bankruptcy.
• Restore borrower rights to discharge government loans in bankruptcy seven years after incurring the loans.
• Limit student loan collection fees.
• Require a study of private student loan interest rates and fees.
• Require expanded publication and recordkeeping regarding job placement data by schools that make claims relating to the employment of graduates.
• Ensure that borrowers who suffered economic losses as a result of violations of their student loan-related rights have administrative remedies and judicial review rights, regardless of whether the decisionmaker is a lender, guaranty agency, or government agency.
• Provide increased protection for consumers from the growing abusive debt collection industry