Legislative Spotlight: New Student Loan Borrower Bill of Rights Amendment Act of 2021 (DC Council)
On Monday, the DC Council held a public hearing on B24-0170, the "New Student Loan Borrower Bill of Rights Amendment Act of 2021."If B24-0170 were enacted, it would add affirmative protections for student loan borrowers and prohibit unfair, deceptive, or abusive acts and practices. It also extends a private right of action offered under the existing DC consumer protection law to student loan borrowers.
Councilmember Christina Henderson noted in their statement of introduction that more than 45 million student loan borrowers collectively owe $1.7 trillion of student loan debt in America. Student debt is the second-largest class of consumer debt in the country, behind mortgage debt. In the District, 116,00 student loan borrowers collectively owe $7.5 billion in student loan debt, with the average balance exceeding $64,000. Nearly a quarter of our residents over age 24 have student loan debt. These borrowers owe more than those in any state, carrying typical debt loads $20,000 higher than the national average.
The New Student Loan Borrower Bill of Rights Amendment Act of 2021 would amend the Department of Insurance and Securities Regulation Establishment Act of 1996 with new language that would:
Clarify that student loan servicers under contract with the United States Department of Education be automatically issued a limited student loan servicing license upon meeting specific criteria.
Clarify denials of applications for approval to forbid prohibited conduct on the part of student loan servicers.
Assign legal obligations to student loan servicers
Establish responsibilities of private education lenders regarding disability discharge and cosigner release.
Require the creation of a revised Student Loan Borrower Bill of Rights by October 1, 2022
Assign the power to enforce the Act to the Attorney General of the District of Columbia
Add affirmative protections for student loan borrowers by ensuring borrowers receive answers to inquiries submitted to their servicers and notice when loans are transferred or sold to another servicer, improving avenues for cosigner release, and discharging debt for total and permanent disability.
Incorporate the private right of action offered under the existing DC consumer protection law, extending the same right to relief for student loan borrowers.
Prohibit unfair, deceptive, or abusive acts and practices by expanding the same protections to student loan servicers operating in the District.
Councilmembers Henderson, Nadeau, Allen, Lewis George, Pinto, Silverman, Robert White, Cheh, and Bonds jointly introduced this legislation. If you have questions or concerns about this legislation, please direct your concerns to their offices.