LANSING, Mich. — Today, Democratic legislators in the Michigan House and Senate introduced a package of three bills that would protect student borrowers and people currently repaying student loans from predatory lenders.

“The strength of our economy depends on a well-educated workforce,” Senator Rebekah Warren (D–Ann Arbor) said. “It’s time to give students the tools they need to make post-secondary education more accessible and affordable.”

Sen. Warren’s bill would create a Student Loan Bill of Rights and Student Loan Ombudsman to help educate and empower borrowers, address student complaints, and help students better understand their rights and obligations.

The three bills would also reinstate the Michigan Higher Education Authority (MHEAA) and address student loan servicers directly by adding a licensing requirement with strict operating guidelines. Currently, servicers can pressure students with fines or denial of service if they fail to open specific types of bank accounts, maintain an account balance or purchase bank products — all of which are unnecessary to pay back a loan.

“Students are working hard to pay for the education they need to get ahead,” Sen. Warren said. “But every year the process gets more complicated and student loan debt grows. We need to enact solid reforms so they know we’re in their corner.”

The legislation would:

  • Create a Student Loan Ombudsman and Student Loan Bill of Rights, sponsored by Sen. Warren and Rep. Henry Yanez (D–Sterling Heights).
  • Add a student loan servicer licensing requirement, sponsored by Sen. Coleman A. Young II (D–Detroit) and Rep. Winnie Brinks (D–Grand Rapids).
  • Reinstate the MHEAA, sponsored by Sen. David Knezek (D–Dearborn Heights) and Rep. Charles Brunner (D–Bay City), which was dissolved in 2006.

Similar legislation was passed in Connecticut last year. Other states are considering related measures to address the $1.3 trillion in student loan debt standing between students and their futures.