Casten, Schrier, Horn, Allred Introduce Bill to Create Higher Service Standard for Loan Servicers
Washington, D.C. – Today Rep. Sean Casten (IL-06), Rep. Kim Schrier, M.D. (WA-08), Rep. Kendra Horn (OK-05), and Rep. Colin Allred (TX-32) introduced the Better Service to Borrowers Act. The legislation would require the Department of Education to create a common loan servicing manual to ensure that no matter who services their student loans, borrowers receive the same basic quality of service.
Casten said, “Our nation holds over $1.5 trillion of student debt, and the wildly uneven quality of our student loan servicers does nothing to alleviate this crisis. Americans deserve to be able to pay off their loans as quickly and easily as possible, no matter what loan servicer they’re assigned to. I’m proud to cosponsor the Better Service to Borrowers Act as one small but important step toward empowering American students, workers, and families to achieve financial stability.”
“Students are having to rely on loans more and more to pay for a college education,” said Rep. Schrier. “We believe that there should be at least a minimum standard of service given to student borrowers, so they get all of the information, every time. They don’t get to choose who services their loans. Quality of service and advice shouldn’t be left to luck.”
The Better Service to Borrowers Act requires the Department of Education to create a manual of common procedures and policies for all companies that service or collect loans. Too often borrowers are saying that they weren’t told that they were eligible for loan forgiveness or that there would be financial penalties for late payments. The manual will require all servicers to make sure borrowers are receiving the correct information and the information in their best interest. Right now, loan servicing companies are not held to any basic standard, which is causing confusion and costing students more money.
“We have a growing student loan debt crisis in our country. Most people can’t afford to get the degree or certificate they need without loans. But these documents are complicated, and the system is tough to navigate. This bill makes sure students see — in plain language — how much they are borrowing and how much the interest will cost them over time,” said Rep. Horn.
Allred said, “The process of repaying student loans is often difficult and time-consuming for many student borrowers and this common-sense measure ensures that there is a minimum standard of service that student loan providers must adhere to. I’m proud to work with my colleagues to ensure we are looking out for student borrowers and providers are delivering quality and consistent services to students,” said Rep. Allred.