Today, Democratic legislators in the Michigan House and Senate introduced a package of three bills that would protect student borrowers and people currently repaying student loans from predatory lenders.
“We know that a strong education is the foundation for a better future, whether through college or trade school, and a stronger workforce can only benefit the entire state,” state Representative Charles Brunner (D-Bay City) said. “Our future depends on a well-educated and skilled workforce, so we need to be proactive in providing access to higher education so that the next generation can have the same opportunity we had to succeed.”
Rep. Brunner’s House Bill 5584 would reinstate the Michigan Higher Education Assistance Authority (MHEAA).
The bills would also create a Student Loan Ombudsman and Student Loan Bill of Rights (HB 5583) and address student loan servicers directly by adding a licensing requirement with strict operating guidelines (HB 5585). Currently, servicers can pressure students with fines or denial of service if they fail to open specific types of bank accounts, maintain an account balance or purchase bank products — all of which are unnecessary to pay back a loan.
“Our students are drowning under a mountain of debt that continues to grow as they prepare to enter the workforce with repayments that could cripple their finances,” Brunner said. “This package of legislation is absolutely necessary to provide financial stability after graduation and ensure that college graduates can pay back their loans without bankrupting their futures.”
The legislation would:
- Create a Student Loan Ombudsman and Student Loan Bill of Rights, sponsored by Sen. Rebekah Warren (D-Ann Arbor) and Rep. Henry Yanez (D-Sterling Heights).
- Add a student loan servicer licensing requirement, sponsored by Sen. Coleman A. Young II (D-Detroit) and Rep. Winnie Brinks (D-Grand Rapids).
- Reinstate the MHEAA, sponsored by Sen. David Knezek (D-Dearborn Heights) and Brunner, which was dissolved in 2006.
Similar legislation was passed in Connecticut last year. Other states are considering related measures to address the $1.3 trillion in student loan debt standing between students and their futures.