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The Biden administration has rolled back a Trump-era student loan policy that prevented state governments from addressing problems with federal student loan payments, according to a report. Monday press release from the Ministry of Education (DOE).
The move will allow states to enforce borrower bills and similar laws in hopes of “improving student loan supervision and accountability to protect students, borrowers and taxpayers.” Twelve states and the District of Columbia have already enacted student loan rights.
The Department of Education’s latest guidelines go into effect this week, allowing state governments to regulate and take action on behalf of borrowers within their state against predatory or deceitful student loans.
“Helping more students pay for college is a top priority, and effective collaboration between the states and the federal government is the best way to ensure that student loan borrowers receive the best service possible.”
Most student loan borrowers probably won’t feel an immediate effect from this guidance, but the DOE’s decision is aimed at detecting and preventing predatory student loan borrowing practices in the future. Keep reading to learn more about what states are doing to protect student loan borrowers and what this means for your student debt.
If you want to borrow private student loans or refinance your current student loans, visit Credible to compare your options.
EDUCATION DEPARTMENT HUERT STUDENT LOAN LAWYER FORGIVEN: HOW YOUR COLLEGE’S DEBT CAN BE INFLUENCED
What is a law student loan?
Borrower rights and other state-level student loan amortization laws aim to protect consumers from predatory lending practices that trap college graduates in a debt cycle. There are 12 states that currently have student loan rights, including:
98% OF GOVERNMENT LOAN FORGIVENESS (PSLF) APPLICATIONS REJECTED
Depending on where you live, student loans can help you avoid payment defaults, end payroll garnishments, resolve billing disputes, stop collection agency harassment, and file for discharge. This week’s ED ruling gives states more power to enforce these kinds of measures.
“States have long played an integral role in overseeing higher education and are on the front lines protecting student borrowers from fraud and abuse,” Massachusetts Attorney General Maura Healey said in a statement. “We applaud Secretary Cardona for rejecting the previous interpretation that misrepresented the authority of the state and encouraged bad actors.”
While state governments can help you explore your refund terms, you have other refund options. You may want to consider applying for forbearance on your federal loans, or even refinancing your private student loans.
Discover the interest on student loans and refinance from real lenders in the table below. You can see your estimated student loan on Credible without affecting your credit score.
BIDEN ‘FINAL RENEWAL’ ISSUES OF STUDENT LOAN CARE: IS LOAN CANCELLATION NEXT?
What to do if you are the victim of predatory lending practices?
Nearly 45 million Americans have over $1.7 trillion in student debt, and many of them will end up paying thousands of interest charges by the time they pay off their loans. Worse, many borrowers end up in default and can even be sued for their student loan balances.
If you believe your loan manager is participating in predatory student loans, research the laws in your state to explore your options. You can contact your state attorney general to file a complaint and discuss the best course of action.
You may also qualify for a federal student loan waiver when your school closes while you are enrolled or if the school was deceitful about the value of your degree. Visit the Federal Student Aid (FSA) website to learn more about the borrower defense program and other federal protections.
Private student loan borrowers may consider refinancing their loans to a new student loan lender. Refinancing private student loans can also give you a better interest rate, which can lower your monthly payment and save you money over the life of your loan. You can compare private lenders for student loans on Credible.
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