Proposed student loan bill of rights would create ombudsman for Mass. borrowers

BOSTON — The numbers are staggering. Nearly 800,000 residents in Massachusetts now owe a total of $33 billion in student loan debt, according to a recent report, and another billion dollars is getting added to that total every year.

That level of debt is definitely on the minds of today’s college students. One Boston University freshman told Boston 25 News that “Everyone is very stressed about student loans," and when students graduate, there's pressure to get a job that pays well.

Another student added “You’re hoping that you’re going to get job that will pay back those loans later on, but you’re talking about 70 grand a year. It’s a killer.”

“The student loan debt crisis is something that has completely exploded in the last couple of years,“ said David Chang, CEO of Gradifi, a Boston company that develops employee benefit plans to help workers pay off student loans.

Chang sees what students are going through firsthand. “When students graduate, they have a very short grace period in which they don't have to start paying back the loan, but once that six-month grace period is up, the lenders that lend to these students are very aggressive in wanting to get their money back.”

One of the compounding problems, according to Chang, is that young people often aren’t equipped to handle their finances. “You will frequently find that people with absolutely fantastic track records, that one little stumble causes them to go in a very different trajectory, whereas that person could very well pay off that loan, and so some of the lenders are taking advantage of these graduates.”

State Senator Eric Lesser, of Longmeadow, who says that Massachusetts has among the highest student loan debt burdens in the country, wants to create a Student Loan Bill of Rights. It would feature an ombudsman, creating a central place for someone to turn for help.

“If you’re getting menacing calls in the middle of the night, if you don’t know how to dig yourself out, there’s really no one in state government helping you,” explained Lesser.

Student loan service companies would be required to register with the state. “In Massachusetts you need a license to be a barber. You need a license to be a hairstylist. You need a license to be a car mechanic. You don’t need a license to service well over a trillion dollars in student loans,” said Lesser.

This bill is also important for the state’s future, Lesser added. “Our economy is dependent on highly educated fields: health care, technology, life sciences. If we don't work to protect graduates and make sure that people are going into those fields and getting those degrees that we want them to get, it's going to be our economy here in Massachusetts that suffers.

About 10 states, including Connecticut, have passed similar legislation in recent years.

Cox Media Group