When you’ve submitted your student loan payment by its due date—that means you’ve paid on time. It seems pretty self-evident, but this rule and others like it are spelled out in a bill making its way through the state legislature.
Dubbed the Student Borrower Bill of Rights, Assembly Bill 376 seeks to curb predatory practices by the companies that service federal student loans.
On May 28, the Assembly voted 59-15 to approve the bill and send it to the Senate for consideration. The author of the bill is Assemblymember Mark Stone, D-Scotts Valley, and the region’s other assemblymember, Robert Rivas, D-Hollister, also voted for it.
“We are one step closer to comprehensive protections for student borrowers,” Stone writes in a statement.
The push to protect the 3.7 million Californians burdened by student debt comes in response to the federal government’s retreat from its role in protecting borrowers.
“If we cannot count on the federal government or industry to protect student borrowers, California must step up and protect its citizens,” Stone adds.
In addition to defining unacceptable practices, the bill would mandate more disclosure by loan servicing firms, and establish mechanisms for enforcement.
Lending practices have come under scrutiny as the overall amount of student debt grows to unprecedented levels. Americans owe 1.5 trillion dollars collectively in federal student loans, which is more than any other type of consumer debt except for mortgages.