Currently, Students Borrowing from Government Receive Help With Complaints From Federal Student Loan Ombudsman
But Private Student Loan Recipients Have Nowhere to Turn For Help
Legislation Would Lead to Creation of a Federal Private Student Loan Ombudsman to Improve Coordination, Assistance
Michael Bennet, U.S. Senator for Colorado, today pushed to help streamline assistance to Coloradans struggling with private student loan issues. Bennet is pushing for a bill, the Private Education Loan Ombudsman Act, that would help private student loan borrowers address complaints or challenges by providing students with an advocate who would work with colleges, universities and private lenders to address their debt concerns.
“Colorado students need to stay focused on books, not bills, and we need to give them the help they need to make that happen,” Bennet, a former school superintendent and member of the Senate Committee on Health, Education, Labor and Pensions said. “Our students and families should have access to the resources they need if they’re having trouble with their lender or struggling to keep up with a loan.”
The 1998 Amendments to the Higher Education Act established the Student Loan Ombudsman, which serves as a centralized federal clearinghouse to help borrowers navigate disputes and problems with federal loans. The Student Loan Ombudsman has earned the support of borrowers and advocates alike. Currently, no such federal resource exists for private student loans borrowers.
By establishing a Private Education Loan Ombudsman, the Private Education Loan Ombudsman Act, would ensure that Americans engaged in private student loan conflicts have access to a similar federal resource.
The Private Education Loan Ombudsman would coordinate services with the Department of Education and Federal Student Loan Ombudsman to ensure that all complaints and problems are reported. The federal body would also assist borrowers in mediating and settling disputes with private lenders.
The bill is co-sponsored by Sens. Brown (D-OH), Mikulski (D-MD) and Franken (D-MN).
Colorado currently houses 27 public institutions of higher education including 12 public four-year colleges and 15 public two-year institutions.