NC lawmakers seek to help people with student debt
Lawmakers file a bill to license and regulate student loan servicers to help people with student loans manage their debt more effectively, reducing financial distress and freeing more of their resources for activities that will boost the economy.
a third of north Carolina borrowers in repayment are unable to people, which causes a cascade of harmful consequences their earnings or even their Social Security benefits, garnished by the federal government as a college. Part of the problem is student loan servicers are failing to work in the best interest of borrowing and are instead hindering rather than helping them manage their death. The Department of Education, Which makes up over 85 of student loans, hires out of state loan. Far servicers to collect payments from borrowers and respond to their questions, borrowers are entitled to be placed in an income based repayment plan if they are unable to make their payments, but servicers often withhold that information and put borrowers in deferment plans, which often costs borrowers more in the long run and brings the servicer more revenue. They are also frequently allocating payments, improperly increasing the total debt and interest. Some borrowers end up with a higher balance than what they borrow even after months, proud to introduce, along with co sponsors, rep Setzer and rap artist er the student borrowers bill of rights. This bill will hold services accountable and vastly improved their practices solid and responsible servicing will help students it's manage their debt more effectively reduce financial distress and pre more of their resources for financial activities That will boost all of north Carolina's economy. Specifically, house bill 707 will require servicers to apply partial payments to a borrower's account to minimize late fees and negative credit and to ask the borrower how they want the overpayment supply. It will require servicers to evaluate borrowers for income based repayment options before placing them into Rivera more than well prohibit services from this leading borrow feel located in a timely manner what in and yes, right loan servicers will be accountable to the office of the commissioner of Banks which will also accept complaints from borrowers and facilitate communication. It is unfortunate that this kind of oversight is necessary, but the data and the stories, some of which you will hear today show that it is. Over a dozen states have already passed student loan servicing laws to address these problems for their citizens. Many more are working on such laws and north Carolina should live up to our reputation of excellence in higher education. Just and passed the student loan bill of Rights. This session, we call on our colleagues to sign on and support this legislation for quick passage so we can begin to offer the many north Carolinians experiencing the heavy, unmanaged that it be okay. Yeah, thank you so much. Representative Hunt for your speech and for your support for this legislation. We will now be joined by Trey robert. Trey is the community the engagement Manager, Ethics Park Conservancy. He's also a co founder of rally cry and serves as a member of the Raleigh Municipal governments, Human relations and Trey received a B. A. In mass communications and Media Studies from William Peace University here in Raleigh, graduating in 2018. He received his Associates of Arts degree from Nash Community College in 2016. He is a proud member of the Holy Zestafoni tribe. He has spoken about the need for student debt reform, on the state of things and in the Washington post Tracy. Thank you for joining us today. Hi, I'm trey roberts. I'm from holliston north Carolina in Halifax County and I live and work here in Raleigh. I have about $38,000 in student loan debt, which is barely budged from. When I graduated from William Peace in 2018, my mother went to community college and my father didn't go to college, which is typical for my hometown. Most folks go to work in town or in a battery. I wanted to go but didn't for two years after graduating high school because I was a bit intimidated by the whole process. I wasn't sure if I really belonged and we didn't have a savings to rely on. I didn't know quite how to get, I didn't know how to go about financial aid. It's tough figuring out faster website and navigating the maze of loans what subsidized and unsubsidized means and so forth and with a little help and some Googling, I eventually figured out that I eventually got that figured out and I started at Nash Community College, then transferred to William Peace relying on federal and private loans to help me through. Once I graduated, I started paying off my private loans while serving at a restaurant and six months later started getting notices from nelnet telling it's time to start paying them. I hadn't yet started my career and was living with three roommates. It was overwhelming and the payments were completely out of reach for my income level. I finally called NElnet and told them I couldn't manage to payments and they gave me a deferment. But it wasn't until my roommate told me about my told me about income days for payment that I looked into it. I had to call NElnet and asked in order to get in the program. Even then they wouldn't take into account the private student loan payments I was making. So the payments were still tough for two years. I had to choose between rent, my student debt payments, health insurance and other lifestyle expenses. And I ended up going without health care for that time. I work freelance jobs to fill in gaps, but I'm far from being able to do the things two. I'm far from being able to do the things that require me to invest in my future. Like buy a house. Not only is this an economic issue, but it is a racial equity issue. Almost half of black graduates more than undergraduate student loans for years after graduation than they did when they received their degrees, Compared to 17 of white graduate In North Carolina. The average annual Household Republic, making the color is 25,000 less than white family. People of colour also face a racial wealth gap where nationally white households have 10 times the wealth of black and brown households. I support the student borrowers bill of rights because I went so long without real support for my servicer and without knowing I should have and could have been in an income repayment program that would have been better for my situation. Thank you. Thank you trey for being such a vocal advocate for student loan borrowers across north Carolina. Our next student loan borrowers couldn't be with us today can easy arranging is a student loan borrower from your hand over time. She wasn't able to join us today because her work schedule wouldn't accommodate travel to and from rally for this event. But she provided a statement to be read on her behalf. Representatives Step Butler, who represents part of New Hanover County, will join us now to retain the rank and statement. Thank you so much. Thank you to Representative for inviting me to be here and joining this rather hot press conference. I'm happy to read the statement for my fellow New Hanover citizen. Her name, Kallithea. You're right. Canadia says she was orphaned as a young girl. So she's been in charge of her finances for a very long time. Her sister stepped in to finish raising her and her brother uh and a very wonderful mom. So she thought that going to college was the best way to build a good feature. Unfortunately, furthering her education ended up being a roadblock for he has student loan debt and she wants to pay it service service, right turn to figure out how to get the debt back in good standing. As a young woman, she enrolled at south Carolina State University on a partial athletic scholarship after an injury injury. She lost that scholarship but she got a job and then ultimately was unable to afford to stay in school. After leaving South Carolina State University, she enrolled at Anderson University thinking that completing her education would help her to get ahead. It didn't take long before she realized she couldn't afford the tuition and was unable to complete her B. A. Now 15 years later, after leaving Anderson University without a degree, She owes $70,000. This is more than she owed when she stopped attending school after leaving school. Eventually, her student loan payments became overwhelming. She thought she did the right thing. When she contacted the financial aid office to ask for help, they helped her work with her loan servicer to get a hardship department. A couple of times during the deferment of course, interests continue to and that is why she owes more now than when she stopped attending school. The payments on her student loan debt after deferment were unaffordable, which was here on the dog. Now that she's better off and she wants forward, that debt is making it impossible for her to realize her dreams and to accomplish her goals. I want to complete my degree. I would be the first in my family to do so. I want to buy a house, but I can't qualify. My student loan servicer won't give me clear accurate information. And so I am stuck for a company that would even pay for me to pretend home price. I'm not in bad standing. I am not allowed to enroll. I am working with a credit counselor to try to get back in good standing. But even with an expert, I can't get trustworthy information. I owe this step. I want to pay it. I'm trying to better myself comprehensive immigration. But the truth is not being told about student ones that I think they should be accountable to me so that I can get back on my financial Good luck to be finished. Actually. Thank you so much. Representative Butler for reading her statement and thank you to Tunisia for sharing your story today. I hope that you're joining us on facebook live. I now invite Carole parrish communications manager at the Center for responsible lending to share a story from a borrower who has asked to remain. Good morning. Thank you for being with us. If you are a reporter who would like to talk with this borrower without um revealing identifying information in an article, please let me know and I will put you in touch with her. This is the statement I am in find a resident who works in healthcare. I wish to remain anonymous at this time because my application for public service loan forgiveness is currently under review because of the extraordinary issues, demands and uncertainty in the process of seeking PSL I have no confidence in the service and out of an abundance of caution. Do not want to speak publicly until the response to my application is signed, sealed and delivered. I filed my application what I called my Holy Grail form in january. So the decision should be made on my case. By May. At one time I was a teacher, I had to make ends sleep by waiting tables and teaching was never going to pay off my student debt. So I eventually had to take, went back to school to prepare for a career that we providing more livable income. As I was finishing my degree, I heard about the public service loan forgiveness program. So I start a job that would qualify, qualify me for making income based repayments with 10 years and then having my loan. Yeah, Here I am 10 years later. And having been through the process. The reports of how few borrowers actually received the loan forgiveness they have sought are not surprising to me to begin with just applying for the program with owners. I spent weeks with phone calls and loads of paperwork and spent the week before turning in my application practically living at Kinko's. There was a nuanced question of whether income based repayment or agent repayment would qualify me for the program. And each time I called to ask about it, I would get a different answer. This had to be correct. And yet I ended up calling with a question hanging up and calling right back to get another agent and see if the answer was the same. If those two totally different things, I would call a third time as a tiebreaker. Sometimes I ended up calling 1/4 or fifth time, usually on the okay from all day I took off work because quote unquote, I had loan stuff to do. I'll tell you it's really not the most ideal way to spend a vacation day. So I finally got everything and properly to start the program. But every year I had to re submit all of my tax and IRS information. When I asked if I had to provide proof of employment with a qualifying nonprofit each year as well, I was told not necessarily, but quote unquote, it is easier for us for us to count. So given my lack of confidence in the service or I took it upon myself to provide that as well every year. This is one of the reasons I kept my existing job for those years. I may have been able to increase my income by changing jobs, but I didn't want to risk some kind of requirement in the fine print that I didn't know about coming into play that would make me ineligible. I was too nervous to make a big change. About midway through, I became panicked when I asked my service or how many payments have qualified so far. I have two loans on one account so each one apply for both. I way of putting my payment towards one or the other, but That I had 70 qualified payments on one loan and 45 on the other. This is of course impossible. But it took me a year of appeals and an audit to find my missing payments. Now I'm on pins and needles, especially especially after hearing how few applicants are awarded the PSLS, even after years of carefully doing everything they thought they needed to do. It is heartbreaking. And for me, the stakes are high. If I am not approved, that is $115,000. I am still on the hook for I don't want to imagine appeals process if I'm denied. Especially given the pandemic in my longer days at work while caring for our daughter. My student debt has impacted my life in many ways, including the stress and strain crossed by seeking the PSL. If I am I am entitled, I had to put off buying a house because of my debt to income ratio. And that is with having no credit card debt. So this program being so uncertain, has really limited by families choices. I support the student borrowers bill of rights. We need among other things to require basic training and consistency of the agents answering the phones because we get an astonishing range of answers and it shouldn't be like Oz behind the curtain with no one knowing who is pulling the strings and having qualifying payments. Not counting towards the PSL F is unconscionable and hurts the many student borrowers in major life Impacting ways. Thank you for your attention to this and please support the student borrowers deliver. Right, thank you carol for reading that borrowers statement. Thank you to the borrower for giving us permission to share their story at a particularly vulnerable time in the loan forgiveness process. Representatives, borrowers supporters thank you again for putting forth important legislation and supporting it. North Carolina unfortunately, has a pretty big slice of the national student debt crisis. We can and we should address these problems through reforms that work so that the best interests of north Carolina students and borrowers are served and all of our citizens and residents can participate in the economy of this state. As we begin to recover and thrive. At the center for responsible lending. We have seen student borrower bills of rights passing over a dozen other states providing immediate relief to students by holding services accountable for basic customer service that they should be offering anyway. We are glad to have the support of the North Carolina coalition for responsible lending in this effort, including 40 organizations that have signed on to support student loan servicing reform. We all know student loan borrowers, they might be ourselves, our family members, our friends, our neighbors, but not all are willing to speak out about how much we struggle to repay debt. So it's hard for folks to know that it's not just their own personal problem. Today, we hope that we've begun to show that repaying student loan debt is a widespread problem, a systemic problem with policy solution. Thank you to tray and Tanisha and our other borrower for being willing to put themselves out there, which is so helpful when we seek to pass reform and so inspiring to others who we hope will become more willing to speak out about their ex. Finally, thank you all who are watching on facebook live and who are present here today for joining us. We'll be happy to answer questions if there are. It's yeah, we got.