New Law Protects Students from Predatory Lenders

(KNSI) – On Friday, Minnesota commissioners and lawmakers were at St. Cloud Community and Technical College to tout a new law designed to protect college students from predatory lenders. The Student Loan Borrower Bill of Rights was passed during the 2021 Legislative Session and became law on July 1st. DFL Representative Zach Stephenson was able to reach across the aisle to make the bill law.

“My the partner in the Senate. Senator (Zach) Duckworth is a Republican I’m a Democrat. But this is not a partisan issue people should be protected when from bad actors in the in the economy.”

The new law requires student loan servicers to be responsive and responsible in managing student loans and prohibits deception and other practices. The Minnesota Department of Commerce must license student loan providers in Minnesota. Representative Stephenson says the bill is meant to protect students.

“I think that the biggest thing is giving students a recourse when they’re mistreated by their student loan servicers in any way, if they’re having trouble, they now have someone in their corner on their side who will fight for them and make sure they’re treated fairly.”

Commerce will regulate the student loan servicers in Minnesota per the law, including reviewing consumer complaints, conducting examinations for compliance, and conducting investigations.

Commerce Commissioner Grace Arnold says the law gives her department teeth to go after bad actors.

“Before we would get complaints and the department had nowhere to turn, so they had to turn people away if they came to us and said we had this problem. We think that they’re being abused, or being mistreated, or being lied to. And there was nowhere in statute that we could go after the company.”

She says the Commerce Department can take away a loan provider’s license to operate in the state if they violate the law. Companies can also be fined. The new rule applies to all loan debt, no matter how much.

Find out more about the new law by clicking here.

To file a complaint against a student loan company, click here.

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