Press Release

Following Trump Administration’s Decision To Eliminate Protections Against Predatory Student Loan Practices, Gillibrand Calls For New Oversight Regulations, Pushes For Legislation That Lowers Monthly Payments To Help Protect College Graduates Against Loan Default And Financial Despair

May 24, 2018

Washington, DC – U.S. Senator Kirsten Gillibrand today called for new oversight regulations and legislation that could dramatically lower student loan payments for hundreds of thousands of New Yorkers. This announcement comes after the Trump Administration’s recent decision to eliminate the office that protects graduates from predatory loan 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.”  

Graduates in New York have higher average loan balances than those in the rest of the United States, and many low-income communities have disproportionately high rates of loan default. Additionally, the number of student loan borrowers in New York has risen sharply over the last ten years, and the delinquency rate among New York student loan borrowers has risen by more than a third over the past decade. This forces borrowers into financial despair and could hurt their credit forever. The Trump Administration’s decision 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 pushed for 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.