Yesterday the House of Representatives passed a Senate version that includes an update to the Dodd-Frank bill with the intention of addressing higher education student loans. S.2122 now advances to the President’s desk for his signature. There are a few good things with this bi-partisan effort and those items are detailed in the section below. The link full bill and Congressional summary can be found in the references below.
Student Loan Protections
- Section 601. Protections in the Event of Death or Bankruptcy
This section: (1) prohibits private student lenders from declaring a default or accelerating a debt against a student borrower on the sole basis of bankruptcy or death of a co-signer; and (2) releases co-signers of private student loans from their obligations following the death of a student borrower. - Section 602. Rehabilitation of Private Education Loans
This section allows a private student loan borrower to request that a reported default be removed from a credit report if the borrower successfully participates in a rehabilitation program that a financial institution chooses to offer. This section also requires a GAO study on the costs, effectiveness, and impacts of such a provision. - Section 603. Best Practices for Higher Education Financial Literacy
This section requires the Treasury Financial Literacy and Education Commission to establish non-binding best practices for institutions of higher education regarding methods to: (1) teach financial literacy skills; and (2) inform and assist students when making financial decisions to student borrowing.
References
Economic Growth, Regulatory Relief, and Consumer Protection Act
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