*VPM intern Alan Rodriguez Espinoza reported this story
A bill passed in the House of Delegates Monday that could extend protections for student loan borrowers and require greater transparency between borrowers and loan servicers.
The bill, introduced by Del. Marcus Simon (D - Fairfax,) prohibits student loan providers from misrepresenting information regarding fees and payments. It also requires loan servicers to obtain a license from the State Corporation Commission.
A recent report found that more than a million Virginians owe over 41 billion dollars in outstanding student debt. The report also shows that the burden of student debt disproportionately impacts communities of color.
During a press conference, advocacy groups spoke in support of the bill. Anna Scholl, executive director of Progress Virginia, says student loan servicers are “not living up to their end of the bargain.”
“Student loans are the second largest body of consumer debt in the country outside of mortgages. We owe more in student loans than we do in car payments, in credit card debt, in all of those things, and they’re the only type of loan that is really unregulated,” Scholl said.
Alexa Severo, a second grade teacher at Sugarland Elementary School in Sterling, says she is struggling to pay off loans she took out when she was working on her master’s degree.
“We think everyone has our best interest at hand so we go to our loan servicer thinking they’re gonna help us and are going to provide us the best information and meanwhile they’re out for themselves,” Servero said.
Similar legislation proposed by Sen. Janet Howell (D-Fairfax) has passed the state Senate since 2016, but it had failed to get enough support in the House until this year. The Senate still has to vote on the bill.