SACRAMENTO, CA - Today Governor Newsom signed Assembly Bill (AB) 376 by Assemblymember Mark Stone (D-Monterey Bay) which will make California the first state in the nation to provide student loan borrowers with a comprehensive Bill of Rights.
“This current federal administration has taken multiple measures to reduce protections for student loan borrowers,” said Stone. “California, once again, takes the lead in protecting consumers from predatory practices when the federal government refuses to do so, even when high profile lawsuits have continuously unveiled the student loan industry’s predatory lending practices.”
Assemblymember Stone’s Student Borrower Bill of Rights will:
- End abusive practices by the student loan industry.
- Create minimum standards for student loan companies.
- Enact special protections for military families, teachers and other public service workers, disabled borrowers, and older Americans.
- Create a new Student Loan Ombudsman to advocate on behalf of borrowers.
- Demand transparency from the student loan industry.
These new consumer protections will give individual borrowers, the California Attorney General, and the Department of Business Oversight strong new tools to stand up for student loan borrowers, ensuring that California continues to lead the nation in the fight to end the student debt crisis.
The bill’s sponsors acknowledge the significance of AB 376 for the almost 4 million California borrowers holding a total of $147 billion in student loan debt:
"The Student Borrower Bill of Rights is a game-changing law that establishes the strongest standards in the nation to ensure student loan companies act in borrowers' best interests," said Suzanne Martindale, Senior Policy Counsel & Western States Legislative Manager at Consumer Reports. "We encourage other states to adopt the comprehensive approach taken by California to hold loan servicers accountable for treating borrowers fairly.”
“We applaud Governor Newsom for doing right by nearly 4 million Californian’s burdened by student loan debt,” said Arnold Sowell Jr., Executive Director of NextGen California. “When pursuing the promise of higher education, no student should be subject to predatory lending practices by student loan servicers. By signing this groundbreaking legislation into law, the Governor has provided real consumer protections to student loan borrowers and shown how California is a leader throughout the nation in helping to solve the student debt crisis.”
"Today is a huge victory for student borrowers in California," said Kristin McGuire, Western Region Director at Young Invincibles.“ We know that overwhelming student debt disproportionately impacts Black, Latinx, and first-generation college students. The passage of AB 376 will help ensure that these borrowers, along with veterans, are protected from predatory lending practices that have plagued our communities for far too long. We applaud Governor Newsom’s leadership and his efforts to protect borrowers.”
"We are incredibly thankful for Assemblymember Mark Stone’s commitment to protect borrowers and defend students from industry abuses. With Governor Newsom’s signature, Assemblymember Stone’s Student Borrower Bill of Rights is now law guaranteeing millions of people with student loan debt have the consumer rights and protections they deserve," said Natalia Abrams, executive director of the nonprofit advocacy organization Student Debt Crisis.
"For years, thousands of California student loan borrowers told us about problems with student loan companies. These problems have cheated people out of millions of dollars and caused real stress for families who had no recourse. Now, with the Student Borrower Bill of Rights, Californians have enforceable rights and can take action when they are harmed."
"For too long, student loan borrowers across California have been trapped in a broken student loan system and preyed upon by companies that act as if they are above the law," said Student Borrower Protection Center, Executive Director Seth Frotman. "Today is a new day for 4 million Californians with student debt-- borrowers across the state now have the tools they need to hold predatory companies accountable and seek justice when denied their rights under the law."