Sen. Lesser, Rep. Higgins Testify in Support of Their Proposed "Student Loan Bill of Rights"

“We cannot be reactive to this issue; we must be proactive and prevent these abuses,” said Sen. Lesser

BOSTON — On Tuesday, Senator Eric P. Lesser and Representative Natalie Higgins of Leominster testified before the Joint Committee on Consumer Protection and Professional Licensure in support of their bill to establish a “Student Loan Bill of Rights,” which would protect student loan borrowers from deceptive practices by student loan servicers.

“Massachusetts cannot rely on a patchwork of federal regulations and state legal actions that do not fully protect borrowers. We cannot be reactive to this issue; we must be proactive and prevent these abuses to the maximum extent possible,” Sen. Lesser said in his testimony.

Some of the documented abuses of students by student loan companies include late-night collection calls and steering borrowers into costly repayment plans. Sometimes, loan servicers will send bill payment notices in unmarked envelopes with vague return addresses, “almost hoping” the envelope gets lost in the shuffle, Sen. Lesser said.

“Then, when the payment is missed, the interest rate skyrockets,” he said.


Rep. Higgins shared her own student loan story with the committee.

“I did everything right. I went to a public college, worked my way through and finished in three years — and my parents still took out $60,000 in loans to help me afford it,” Rep. Higgins said.

Their proposed bill would establish a state Student Loan Ombudsman to investigate students’ complaints, educate borrowers and monitor student loan servicers. It would also require all servicers to be licensed with the state and follow standards of conduct subject to enforcement by the Division of Banks.

The bill would also allow the Bank Commissioner to take legal action against servicers who violate this bill of rights, including forcing servicers to repay student borrowers if they were found to be overcharged.

The bill is based in part on a similar bill that passed in Connecticut in 2015. Since then, 10 other states have enacted similar legislation: Michigan, Washington, Rhode Island, Oklahoma, California, Maine, Minnesota, North Dakota, Iowa and New York.

At the end of 2016, there were 44 million Americans with $1.3 trillion in debt. In Massachusetts, the average amount of debt per student is at $31,466, seventh highest in the country.