FOR IMMEDIATE RELEASE:
May 1, 2018
Mario Moretto, Communications Director
MECEP urges lawmakers to override LePage’s veto of Student Loan Bill of Rights
AUGUSTA, Maine — The Maine Center for Economic Policy today called on lawmakers to override Gov. Paul LePage’s veto of a bill that would protect Mainers from predatory student loan servicing practices.
The bill — LD 1507, “An Act to Establish a Student Loan Bill of Rights to License and Regulate Student Loan Servicers” — provides commonsense consumer protections for student loan borrowers.
“Lawmakers committed to keeping graduates in Maine so they can fully participate in Maine’s economy should override the governor’s veto of the Student Loan Bill of Rights,” said Jody Harris, MECEP’s Associate Director. “Student borrowers and their parents and grandparents who cosign loans need protection against student loan servicers who profit from dirty business practices.”
By withholding critical information about repayment options and misleading borrowers about their debt, loan servicers make it harder and more expensive for students and graduates to pay for their education. These deceptive practices can result in default, creating even more fees for borrowers — and profits for servicers. This cycle of debt and fees can devastate borrowers’ credit ratings and financial futures.
The Student Loan Bill of Rights will help consumers by making three important changes to Maine’s Consumer Credit Code:
- It creates a registration process for loan servicers to operate in the state;
- It prohibits student loan servicers from defrauding or misleading student loan borrowers; and
- It allows the state to investigate student loan servicers to ensure compliance and enforce the law.
According to the Consumer Financial Protection Bureau, or CFPB, Maine’s total outstanding student loan debt is $5.9 billion as of 2016, with the average student debt load in Maine at roughly $30,000. According to a 2017 report by CPFB, student loan complaints in Maine increased by 100 percent from 2016 to 2017, while student debt collection complaints increased by 60 percent during the same time period.
Lawmakers can lead the nation in protecting student borrowers from unfair loan servicing practices with commonsense consumer protections. MECEP urges lawmakers to override the governor’s veto of LD 1507.