Stone Leads State Legislators Across US in Condemning Federal Student Loan Decree
SACRAMENTO – Assemblymember Mark Stone (D-Monterey Bay) has joined legislators from 14 states in urging the federal Department of Education (DOE) to withdraw its recent Notice of Interpretation designed to limit states’ abilities to enforce regulations to protect student borrowers.
“The federal government is unlawfully attempting to hamper California’s and other states’ rights to regulate student loan servicers in order to deter predatory practices. I’m proud to join with my colleagues across the country to stand up for our states’ constitutionally protected right to pass and enforce laws that protect our student borrowers.”
On March 12, the DOE issued a memo arguing that states cannot pass or enforce regulations protecting student borrowers from predatory student loan servicing practices. It declares that the federal government rules preempt state licensing requirements for student loan servicers, and attempts to bar state Attorneys General from enforcing student loan servicing laws.
The signatories to the letter include legislators from the states of California, Colorado, Illinois, Maine, Massachusetts, Minnesota, Missouri, New Jersey, New Mexico, New York, Rhode Island, Washington, Virginia, and Washington, D.C.
Previously, Stone released a statement condemning DOE for its action, which read in part: “The increasing amount of student loan debt combined with unreliable and predatory loan servicing hampers state economic growth and prevents borrowers from achieving financial independence. . . . Since the federal government clearly disfavors additional protection of American student borrowers, it is California’s right and responsibility to use state tools to protect its own citizens.” The full statement is here.
In 2016, Stone wrote, the California Legislature passed, and Governor Brown signed into law the Student Loan Servicing Act to protect California borrowers from student loan servicers’ predatory behavior and to ensure that borrowers receive reliable information regarding student loans and repayment options. The measure is set to take effect on July 1, 2018.
Copy of the original letter: Letter to DOE from state legislators regarding student loan servicing memo
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