In early March, Senate Bill 196, the "Student Borrowers’ Bill of Rights", was filed in the N.C. Senate. If passed, the bill would create a license requirement process for lenders to help ensure fair treatment of student loan borrowers and their families.
The bill would impose an application process on student loan servicers, which would include a certificate of good standing from the state, the applicant’s financial condition and the qualifications and business history of the applicant. If a loan servicer passes the application process, the commissioner of banks will give it a license.
The primary sponsor of the bill, N.C. Sen. Rachel Hunt (D-Mecklenburg), said she is trying to set up parameters for student loan lenders to make sure they treat student borrowers well.
“Right now, there are no parameters at all," Hunt said. "So they can do things like mislead them, make sure they pay extraordinary fees and change the terms of the loan.”
Hunt is also a college counselor, which she said is a reason for her interest in the bill.
“I’ve seen through my own students, what student debt is doing to people and how it destroys lives,” Hunt said.
Hunt said lenders currently do not look into income-based repayment programs or public service loan forgiveness programs for people who are not able to pay their student loans. Instead, the lenders immediately put those people in default, which is the source of much of the trouble with student loans, she said.
The bill would prohibit lenders from providing information about a disputed payment to a consumer reporting agency until 60 days after a written inquiry from the borrower. Hunt said the information given to a consumer reporting agency can affect a borrower's credit score.
James Mwombela, a student loan advisor who consults for Student Loan Planner, said the bill could allow borrowers to avoid costly mistakes.
