Bill: SB 6029 — 2018
Establishing a student loan bill of rights (Liias, Ranker, Fain)
Establishes the Washington student education loan bill of rights. Requires the student achievement council to designate a student loan advocate within the office of student financial assistance to provide timely assistance to a student education loan borrower with a student education loan. Requires the director of the department of financial
institutions to establish fees sufficient to cover the costs of administering the department's program for student education loan servicers and the student achievement council's student loan advocate. Requires the state institute for public policy to conduct a study on the impact and cost-effectiveness of establishing a student loan authority to refinance existing federal and private undergraduate and graduate student loans from the proceeds of tax-exempt bonds. Creates the student loan advocate account. Requires the state treasurer, beginning in the 2020-2021 fiscal year, to annually transfer from the financial services
regulation fund to the student loan advocate account, the greater of one hundred seventy-five thousand dollars or twenty percent of the annual assessment derived from student education loan servicing.
SUMMARY OF 1ST SUBSTITUTE COMPARED TO ORIGINAL BILL
(1) Establishes a Student Education Loan Advocate (Advocate) to assist student education loan borrowers (borrowers), compile data, provide information on student education loans, and receive, review, and take action on complaints from borrowers. (2) Requires student education loan servicers (servicers) to obtain a license from the Department of Financial Institutions (DFI) to operate in the state, and authorizes the DFI to establish fees. (3) Requires servicers to comply with various provisions regarding assessing and crediting fees; account information and dispute requests; acquiring, transferring, and selling servicing rights; and reporting information. (4) Prohibits third-party student education loan modification servicers from several practices that may misrepresent the student loan situation or encourage a borrower to do something counterproductive to their situation. (5) Instructs the Washington Institute of Public Policy to study the costs and benefits of establishing a student loan authority and to report back to the legislature by December 31, 2018.
EFFECT OF CHANGES MADE BY 2ND SUBSTITUTE (Ways & Means)
(1) Requires the Washington State Institute for Public Policy (WSIPP) to review available literature on the impacts of borrower requirements of similar loan refinancing programs instead of evaluating the equity and effectiveness of stateoperated loan refinance programs in other states. (2) Removes requirements for WSIPP to analyze borrowers who have utilized stateoperated loan refinance programs in other states. (3) Removes requirements for WSIPP to prepare cost estimates for similar repayment and forgiveness options through a state-operated loan refinance program as those that are available to borrowers of federal student education loans.
EFFECT OF SENATE FLOOR AMENDMENTS
Exempts private, nonprofit educational institutions' payment plans and accounts receivable from student education loan servicers' requirements.
Hearing Date: Wednesday, February 21, 2018 -- 1:30 pm
WA State Legislature Link:
http://app.leg.wa.gov/billsummary?BillNumber=6029&Year=2018 (opens a new browser tab)