A new piece of legislation has been proffered that would be greatly beneficial to those with student loans, but thus far, it does not seem to be getting a lot of attention. If you have student loans, you should join us and raise your voice to promote HR 3892: Student Loan Borrower’s Bill of Rights Act, sponsored by Representative Frederica Wilson (D-FL). Read on to see why this legislation is so important and could be life-changing (and affirming) for those deeply mired in student loan debt…
As it stands now, student loans can follow you to the grave if you are unable to pay. This is unlike any other form of debt – even tax debts owed to the IRS have a shelf life. Wilson’s bill would draw a line in the sand so that those truly unable to pay their debts will not have their life ruined over debt they likely didn’t understand when they took it on.
Most students have no idea how much their loan balances are prior to graduation and don’t have a solid plan on how to repay. And with the job market shaky for people of all ages, and for ages 18-24 in particular, loan repayment can be unfeasible on a minimum wage paycheck (or no pay if you can’t find a job). Here’s how HR 3892 would help:
• Would allow student loans to be routinely discharged in bankruptcy like other unsecured debt
• Would set a six year statute of limitations on student loans
• Would block garnishment of social security benefits, tax refunds and wages for student loan collections
• Would allow borrowers of Parent PLUS loans to participate in Income Based Repayment, Income Contingent Repayment and Pay As You Earn plans
• Would allow borrowers of Parent PLUS loans to participate in loan forgiveness programs in areas of national need
• Would prevent student loan debt from being listed as adverse activity on credit reports
• Would block suspension of professional licenses for those in default on student loans
• Would prevent colleges from blocking access to transcripts or proof of degree for those in default on student loans
• Would allow 50% of loan balance cancellation after five years of public service and the other 50% after a subsequent five
If even half of these measures were passed, the outcomes for those stuck with over-sized student loan balances they cannot pay (and may never be able to) would be life-changing – quite literally. As it stands, student loan debt has been carved out for preferential treatment and those that owe and can’t pay are subjected to cruel and unusual punishment beyond the scope of ordinary debt collection measures.
Senior citizens living in penury can see a good chunk of their social security benefits seized for overdue student loans. Those earning minimum wage (or not much higher) are subjected to 15% wage garnishment that can leave them unable to live even at a subsistence level. Not only that, but the government has contracted with an agency – Educational Credit Management Corporation (ECMC) – that fights bankruptcy proceedings and has a deplorable history of trying to force cash-strapped cancer victims and the handicapped to continue paying their loans despite their disabilities and obvious poverty.
The Student Loan Bill of Rights is co-sponsored by Corinne Brown (D-FL), Eleanor Norton (D-DC), Bobby Rush (D-IL), Madeleine Bordallo (D-GU) and Judy Chu (D-CA), but desperately needs more help. For this bill to have a chance at getting to a vote, it needs bi-partisan support. You can help with this. Contact your Representative and tell them to voice their support for HR 3892: Student Loan Borrower’s Bill of Rights Act, get it to a vote and get it passed on to the Senate for further consideration.
If you’ve got student loans, have we got some cool stuff for you. First, sign up for Tuition.io’s free student loan tool to track and optimize your debt. Second, read our blog constantly for information on living with student loan debt, important legislation and programs to help you get out of debt sooner. Finally, browse our Student Loan Help Center for a codex of all things student loan related, including How To guides on a wide variety of topics.