February 2019--Led by RIOPC, RI's Joint Working Group on Student Loan Borrower Protections released its final report and recommendations in response to Senate Resolution 2982 (2018). Its findings were also reported by WPRI.
The workgroup met over a period of five months to review national models and identify where Rhode Island could strengthen policies and processes to protect current and future student borrowers. The report makes following recommendations:
Registration: All student loan servicers operating in Rhode Island should be required to register with the Department of Business Regulation or face financial penalties. The Rhode Island Department of Business Regulation should serve as the primary entity that registers student loan servicers, collects registration fees, and maintains contact information for the registered servicers and other information deemed relevant by the Department.
Standards: Legislation should establish minimum standards for the servicing of student loans, including requirements for servicers to notify borrowers about the status of their loans, their progress toward repayment, and their eligibility for any and all loan assistance programs, including income-based repayment plans, loan deferments, and loan forgiveness programs. The legislation should forbid unfair and deceptive practices by servicers. The legislation should also require servicers to maintain records of all communications with Rhode Island borrowers.
Enforcement: The Rhode Island Attorney General’s Office and the Rhode Island Department of Business Regulation should develop a system to investigate potential violations of the servicing standards, issue financial penalties for noncompliance, and seek financial restitution for borrowers.
Borrower Assistance: The Rhode Island Attorney General’s Office and the Rhode Island Department of Business Regulation should develop a system to collect and process borrower complaints, refer complaints for investigation, and offer assistance finding appropriate counselors to borrowers in distress.
Borrower Assistance: The Rhode Island Department of Business Regulation should collect registration fees into a restricted receipt account, the proceeds of which should be used for:
Borrower Assistance: The Rhode Island Office of the Postsecondary Commissioner and the Office of the General Treasurer should collaborate to build a website that will educate student loan borrowers about their rights and responsibilities as borrowers, and about strategies for managing their student loans. The website should be funded from the restricted receipt account.
Oversight: The Rhode Island Attorney General’s Office, Department of Business Regulation, Office of the General Treasurer, and the Office of the Postsecondary Commissioner should meet quarterly for one year after passage of legislation to ensure sound implementation. Each year thereafter, the group should meet annually to review data on consumer complaints and their resolutions, and evaluate the servicer registration process.