Insider NJ

New Jersey Citizen Action Applauds Vote Advancing Student Loan Protection Bill Through Assembly Higher Education Committee

Insider NJ — June 6, 2019

Trenton, N.J. — New Jersey Citizen Action and other advocates today applauded a vote advancing S-1149/A-455 through the State Assembly Higher Education Committee. The bill, sponsored by Senator Sandra Cunningham (D-31) and Assemblyman Gary Schaer (D-36), calls on the state Department of Banking and Insurance to establish strong lending standards and a licensing requirement for any student-loan servicer operating in the state. The bill also gives DOBI the power to enforce standards, fine violators and to designate a student-loan ombudsman, and will protect students from abusive practices by loan servicers who manage and collect student debt.

"Moving this common-sense bill out of the committee and to the full Assembly for a vote will go a long way to ensure a fair lending and repayment environment for student borrowers," said Phyllis Salowe-Kaye, NJCA Executive Director. "With more than a million New Jersey borrowers owing more than $43 Billion in student debt, this legislation is more critical than ever."

The student loan debt crisis puts too many New Jersey graduates on a destructive cycle of damaged credit, limited career paths and missed economic opportunities. "Decades of student loan payments can wreck our credit, delay buying a home, and spur a lifetime of financial insecurity," said Alexandra Anderson, Rutgers University Student Government. Easing the pathway for students to pay off their student loan debt will be a great economic benefit to the state.

"For many of us, student loans are no longer a choice," said Navruz Baum, outgoing president of the RU Engineering Governing Council and a student government representative. They are simply a fact of life. We go to college because we want to do things right. We want a better future for ourselves and for our families, and we want to become productive members of society. In return, we are sentenced to decades of debt and financial insecurity."

"I applaud the New Jersey General Assembly for taking up this critical legislation and standing up for the more than one million borrowers in this state," said Seth Frotman, Executive Director of the nonprofit Student Borrower Protection Center and the former top student loan official at the federal Consumer Financial Protection Bureau. "As the Trump Administration continues to turn a blind eye to abuses by the student loan industry, this bill will ensure that the State of New Jersey can demand accountability from predatory student loan companies and protect borrowers' rights."

"Fortunately, state leaders in New Jersey are taking action to makes sure that student borrowers trying to manage debt, can do so without fear of unfair, deceptive or abusive practices on the road to paying for their hard earned education." said Salowe-Kaye. "Now the full assembly must pass this bill and send it to the Governor to sign."

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