August 23, 2019
ICYMI: SUPERINTENDENT LACEWELL’S OP-ED IN NEW YORK DAILY NEWS: N.Y. IS STEPPING UP FOR STUDENT BORROWERS
For many New York college students, a new school year means another year of debt. Nearly 3 million New Yorkers currently owe over a grand total of $86 billion in educational loans.
As college tuition continues to skyrocket, more than 44.5 million Americans owe more than $1.6 trillion in student debt, and more than a tenth of the outstanding amount is considered in serious delinquency. It’s a growing problem.
What’s most disturbing is that students who are investing in their futures by obtaining a college degree are being neglected by Washington.
The Trump administration and Education Secretary Betsy DeVos have dismantled critical consumer protections available to students — from gutting the authority of the Consumer Financial Protection Bureau’s student lending office. Worse, the president has nominated a top official at a much-maligned student loan servicer as the agency’s new student loan ombudsman. His administration has refused to process applications for federal loan relief for students and rejected 99% of applications from hardworking public servants for the Public Service Loan Forgiveness Program. As a result of these actions, student borrowers and their families are left to fend for themselves.
As the first in my family to attend college, I experienced the soaring costs of higher education and the tough choices students are forced to make. As superintendent of financial services, I am committed to protecting student borrowers from unfair practices and abusive lenders.
My department is stepping up while Washington steps down.
Last week, DFS reached a settlement with Tuition Options LLC for operating as a sales finance company without a license, leveraging New York students’ finance agreements as collateral. We will continue to be aggressive in holding violators to account when they break the law and take advantage of our students.
This is all possible under the leadership of Gov. Cuomo. As attorney general, he championed a nationwide reform of the student loan industry, returning hard-earned cash to the pocketbooks of New York families. As governor, he has made higher education accessible to families through the Excelsior Scholarship, which provides free tuition to families earning up to $125,000 per year at SUNY and CUNY colleges. He has also enacted sweeping protections for student loan borrowers by authorizing DFS to regulate and license student loan servicers that serve New Yorkers.
We’re not stopping there. As the new academic year begins, DFS is rolling out a new “Step Up for Students” initiative to safeguard student loan borrowers from discriminatory or predatory practices by student loan servicers.
At the core of our initiative is our recently proposed regulation that will require student loan servicers to implement and adhere to common-sense and fair standards to address systemic problems in the industry. The regulation requires servicers to provide clear and complete information and apply payments in the student’s best interest, rather than putting their own profits first.
We are also giving students a voice — by meeting with them around New York State to hear and respond to their concerns. And we’re planning to provide an online one-stop shop where students can file complaints about student loan servicers who aren’t living up to our standards, and where they can learn more about managing their student debt.
Cuomo is keeping his promise to help students navigate the loan process, so the department will also be appointing the first-ever DFS student advocate to independently listen and respond to complaints, mediate disputes and educate New Yorkers about student loans.
Washington should not get in the way of New York students achieving their dreams. The financial futures of families and students are in our hands, and we remind the Trump administration: Government works for the people, not the other way around.
Lacewell is the superintendent of the New York State Department of Financial Services and an adjunct professor at New York University School of Law.