Indebted Minnesotans have new protections for consumers

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Gustave Adolphe College

As an educator for more than 20 years, I love teaching but also love learning.

My professional practice has been expensive to me. After paying off my student loans, consolidation was an option. I also considered income-based repayment plans and public service loan forgiveness. My communication with my loan officer was confusing and frustrating. I received a statement stating that I could pay $ 3,000 per month. Then, I was able to pay $ 750. This was twice what I had paid. They weren’t able to help me navigate the process. When I pay off my loans in 2037, I will have paid $30,000 in interest.

Although I would love to say that my story is unique, many Minnesotans are in the same or worse situation. Education Minnesota has received so many stories through its Degrees. No Debt program.

According to the Student Borrower Protection Center, Minnesota ranks fifth in the nation for student loans we have per person. This amounts to $ 37,492 to state college students. Minnesota has $ 29.1 Billion in outstanding debt.

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The Consumer Financial Protection Bureau (CFPB), in a June report, described the unfair, deceptive, and abusive acts that loan officers commit. It also prevents borrowers from accessing information about loan waivers for ten years of federal service. , Public service loan discount.

Public sector workers have been crucial to our well-being during the COVID-19 pandemic. Federal law requires that all federal employees be provided with information about getting civil service loan forgiveness.

Repairers were found to have engaged in deceptive acts or practices, including telling borrowers they couldn’t be eligible for the program and refusing to help too many.

Education Minnesota and its allies have worked for years to create legislation supporting and protecting indebted students. This year, the Borrowers Bill of Rights was created. Students (SBBOR). If such deceptive practices occur in Minnesota, this will help to alleviate them.

Sarah rother

SBBOR will make it mandatory that student loan services like Navient and FedLoan Servicing – multi-millionaire companies that act as intermediaries between borrowers, lenders, and borrowers – operate in Minnesota. We hope these common-sense rules will be adopted nationwide.

The American Federation of Teachers, Consumer Finance Protection Bureau, and other states have sued student loan managers for taking advantage of borrowers. They also used them to spread disinformation and deceitful practices across the country. Minnesota.

Basic protections for student borrowers are now available, including:

  • The loan managers will have to promptly and accurately report repayment and loan information. The loan manager will notify the borrower if and when a loan has been transferred and to whom.
  • Now, borrowers must be evaluated for income-sensitive repayment options. This will make it easier to pay while keeping track of their finances and protecting credit. The loan managers will need to assess if forgiveness options are available for a borrower.
  • Additional consumer protections will be available to borrowers to help them repay their education debt. This will allow them to pay off their loans and make sure that they don’t hurt their chances of getting paid. Due to student debt, borrowers cannot make important decisions such as buying a home or planning a wedding.

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SBBOR was bipartisanly supported and was written by Senator Zach Duckworth and Rep. Zack Stephenson. Stephenson was the leader of this effort for the three previous sessions. He made sure there was awareness about the difficulties Minnesotans face when repaying loans or getting loan forgiveness.

Minnesota is now the 15th state to adopt a borrower’s bill of rights.

Students loan borrowers such as me need someone to help protect them from loan officers’ abuse. Minnesota has this option.

Sarah Rother, a teacher at Eastern Carver County Schools District, testified before the legislature about school debt issues.

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