New York, NY – On the heels of the Trump Administration’s move to eliminate the office that protects recent graduates from predatory loan practices, U.S. Senator Kirsten Gillibrand stood with New York City Commissioner of the Department of Consumer Affairs Lorelei Salas, students, and advocates to demand new oversight regulations and push for legislation that could dramatically lower monthly loan payments for hundreds of thousands of New Yorkers. The Trump Administration announced this week that it will pare back its monitoring of student loan companies for predatory practices, which could create massive financial burdens for recent graduates and push them into default when they are just entering the workforce.
“Thousands of New Yorkers are graduating from college this time of year, and many of them will already be buried in student debt from the moment they walk across the stage and get their diploma. But instead of helping them out, the Trump Administration just passed new rules that make students even more vulnerable to predatory loan practices that could push them into financial despair,” said Senator Gillibrand. “We can and must solve this problem now, because our student debt crisis is creating tremendous hardship for our recent graduates and holding back an entire generation. We need real oversight of our student loan servicers, and we need to make sure that students can actually pay back their loans without defaulting.”
“No one should ever have to think twice about how they’re going to finance their college education,” said New York City Department of Consumer Affairs Commissioner Lorelei Salas. “New York City is home to several areas where student loan default rates are higher than the national average, and there is no better time than the present to strengthen protections to ensure everyone has the financial ability to attend college.”
“The simple fact is that as student loan debt levels soar over $1.4 trillion, college graduates, and the economy at large, suffer. As issues with student loan providers like Navient and others prove, students need more protections from predatory practices not fewer. We are glad to see Senator Gillibrand spearheading a solution that would bring new oversight protections and lower monthly payments for graduates,” said Smitha Varghese, New York Public Interest Research Group Board of Directors Chairperson and Queens College student.
Graduates in New York have higher average loan balances than those in the rest of the United States and many areas of the city have disproportionately high rates of loan default, which forces borrowers into financial despair and could hurt their credit forever. The Trump Administration’s decision just days ago to close the office dedicated to protecting student loan borrowers opens up graduates to predatory practices that could force them to pay higher monthly payments and increase the likelihood that they will default on their loans. Gillibrand called for new oversight regulations to ensure that borrowers aren’t being exploited by predatory companies.
To address this problem, Gillibrand is pushing to pass two critical pieces of legislation that could help students dramatically lower their payments, the Students Emergency Loan Refinancing Act and the Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act. Specifically, the Students Emergency Loan Refinancing Act would cut interest rates and immediately reduce debt for millions of student loan borrowers. The SIMPLE Act would automatically enroll vulnerable borrowers in income-based repayment programs, which would help slash monthly payments, eliminate burdensome paperwork requirements, and reduce the likelihood of default.