(May 4) – Rep. Faith Winter’s bill to protect Coloradans with student debt earned initial approval from the House this morning.
“Why wouldn’t we provide the same level of protection for students that we have for other debt holders?” said Rep. Winter, D-Westminster. “This bill protects the 761,000 Coloradans who are repaying more than $19 billion in student loan debt. It gives all of those Coloradans a place to go if they have questions or need to file a complaint and ensures servicers will be held accountable for the rules they should already be complying with.”
HB17-1352 gives licensing, oversight and investigative authority over student loan servicers to the Colorado Attorney General. It establishes licensing requirements for student loan servicers to ensure that they meet basic standards for consumer protections.
Under the bill, servicers that violate existing state regulations could have their licenses revoked. The Attorney General’s office would be able to review and resolve complaints by borrowers and investigate alleged fraud and misconduct.
Rep. Winter went on to explain that there are several tactics used by student loan servicers that create problems for Coloradans, including: directing borrowers away from the best payment plans and encouraging borrowers to accept plans with higher interest rates; creating administrative hurdles for borrowers to access their payment history; failing to respond to questions and payment processing errors; and failing to provide sufficient information to borrowers regarding how to release cosigners, deadlines, interest rates, and eligibility for benefits such as loan forgiveness.
During the bill’s first committee hearing, several recent graduates spoke in favor of the bill, citing personal struggles with student loan servicers and issues paying off debt. Fifty-six percent of Colorado college graduates have student debt, with an average burden of $25,000, according to data from the Institute for College Access & Success.
The bill continues to the House floor for third reading.