RI Senate Calls For More Protections For Student Loan Borrowers

PROVIDENCE, RI — Rhode Island Senate lawmakers approved a resolution Tuesday calling for the state's Postsecondary Education Commissioner to take action to help student loan borrowers. The resolution calls for the creation of a work group tasked with identifying protections for borrowers.

"Higher education or job training is a necessity for a successful career, but it’s become increasingly common that its high cost results in crushing personal debt," Said Sen. Hanna Gallo, the resolution's sponsor. "Student debt is an enormous burden on individuals and families, and can multiply the effects of personal crises if the borrower cannot stay current on their loans. Onerous late fees and collections practices from lenders can make it impossible for borrowers to get back on track, turning temporary problems into permanent ones."

Gallo's resolution points out that the federal government removed protections for student debt borrowers before the coronavirus pandemic hit, which included those that kept debt collectors from charging high fees on past-due loans, as high as 16 percent.

After the pandemic hit, the Department of Education implemented short-term protections, including stopping collecting on defaulted loans and no interest accrual. These protections are set to expire Sept. 30.

"Ultimately, we need the federal government, which is involved in most student loans, to make major changes, but in the meantime, Rhode Island needs to identify all the tools that are available to us to protect student loan borrowers in our state," Gallo continued.

Gallo's resolution calls for the Postsecondary Commissioner to form a work group to review how the state can protect student debt borrowers. The group is asked to present their findings by Jan. 14, 2022, including which agencies can best provide those protections, along with any needed law or regulatory amendments.

According to data from the General Assembly, that average student loan amount is over $31,000. As of 2020, total student loan debt in the country was around $1.67 trillion.