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Durbin introduces amendment providing student loan protections

U.S. Sen. Dick Durbin (D-Ill.) speaks. Durbin introduced an amendment that would provide consumer protections for student loans.

U.S. Sen. Dick Durbin (D-Ill.) speaks. Durbin introduced an amendment that would provide consumer protections for student loans.

Daily file photo by Paige Leskin

Daily file photo by Paige Leskin

U.S. Sen. Dick Durbin (D-Ill.) speaks. Durbin introduced an amendment that would provide consumer protections for student loans.

Samantha Handler, Assistant City Editor

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U.S. Sen. Dick Durbin (D-Ill.) introduced an amendment Thursday that would improve consumer protections for federal and private student loans and help ease student loan debt for families, according to a news release.

The amendment to the Economic Growth, Regulatory Relief and Consumer Protection Act — introduced in November and aimed at promoting economic growth as well as enhancing consumer protections — includes a Student Loan Borrower Bill of Rights and some bankruptcy protections. Outstanding student loan debt overall stood at $1.4 trillion in 2017, according to news release from Durbin.

The bill went to the Senate floor on Thursday, indicating that it will be considered for enactment during the next few days.

“For many Americans today, there’s no bigger drag on their families than student loan debt,” Durbin said in a speech on the Senate floor on Thursday. “Unlike most of us, who can borrow a reasonable amount to finance our college education, this generation of college graduates starts off with an average debt of $27,000 on day one after graduation. Many have much, much more, especially if they were duped by this notorious for-profit college industry in America.”

Durbin’s amendment — also sponsored by Sens. Jack Reed (D-R.I.), Elizabeth Warren (D-Mass.), Patty Murray (D-Wash.), Sherrod Brown (D-Ohio) and Richard Blumenthal (D-Conn.) — would establish disclosure requirements and protections for borrowers when a student loan is sold, transferred or reassigned, according to the document.

The amendment also requires services to respond in a timely manner to inquiries and provide online access to information related to the borrowers’ loans. Additionally, it ensures that private education loans are dismissed when a borrower dies or becomes disabled.

It also clarifies the bill’s “undue hardship” exception to non-dischargeability in bankruptcy. The bill clarifies debtors receiving Social Security disability benefits, acting as caregivers for veterans, elderly or chronically ill family members, or making less than 200 percent of the poverty guidelines are eligible to have loans dismissed.

In 2005, Congress passed a law that gave student loans protected status in bankruptcy, meaning that students would not be able to be dismissed from the loan or become less burdened if they were struggling make payments. The new amendment restores dischargeability in bankruptcy.

“Banks fought hard more than a decade ago to exempt student loan debt from bankruptcy protections, and now we’ve seen the consequences too: too many students are crushed by debt with no chance for a new start,” Warren said in a news release in May. “Senator Durbin’s bill will restore this basic safeguard.”

Durbin said in his speech that he has heard stories from constituents who had to forgo buying a home to pay the debt, or have chosen to just stay in school rather than deal with a mountain of loan payments.

He added that student loan reform will not only help the students who have accumulated the debt, but also alleviate the hardship placed on families as well. He said too often student loan debt also burdens parents and grandparents.

“If we can take up the issue to make it easier for banks in America, we can spare a few minutes to debate whether or not we can make it easier for student borrowers to survive when the student debts that they face are stopping them from moving forward in their lives,” Durbin said on the Senate floor Thursday. “Massive debt that stops them from getting married, buying a home, a car, starting a family, that’s the reality for many families across America.”

Twitter: @sn_handler