HOUSE BILL No. 6446

 

 

October 17, 2018, Introduced by Rep. Yanez and referred to the Committee on Appropriations.

 

     A bill to provide for a student loan ombudsman and prescribe

 

his or her powers and duties; and to prescribe the powers and

 

duties of certain other public officers and agencies.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the

 

"student loan ombudsman act".

 

     Sec. 3. As used in this act:

 

     (a) "Department" means the department of insurance and

 

financial services.

 

     (b) "Director" means the director of the department or his or

 

her designated representative.

 

     (c) "Servicing" means any of the following:

 

     (i) Receiving any scheduled periodic payments from a student

 

loan borrower under the terms of a student education loan.

 


     (ii) Applying the payments of principal and interest and any

 

other payments with respect to the amounts received from a student

 

loan borrower, as may be required under the terms of a student

 

education loan.

 

     (iii) Performing any other administrative services with

 

respect to a student education loan.

 

     (d) "Student education loan" means any loan that is primarily

 

for personal use to finance education or other school-related

 

expenses.

 

     (e) "Student loan borrower" means either of the following:

 

     (i) A resident of this state who has received or agreed to pay

 

a student education loan.

 

     (ii) Any person that shares responsibility with an individual

 

described in subparagraph (i) for repaying his or her student

 

education loan.

 

     (f) "Student loan ombudsman" means the department employee

 

designated as the student loan ombudsman under section 5.

 

     (g) "Student loan servicer" means any person, wherever

 

located, that is responsible for the servicing of any student

 

education loan to any student loan borrower.

 

     Sec. 5. The director shall designate an employee of the

 

department as the student loan ombudsman to provide timely

 

assistance to student loan borrowers. In consultation with the

 

director, the ombudsman shall do all of the following:

 

     (a) Ensure that every student loan borrower in the state has

 

equal access to all of the following:

 

     (i) A quality, affordable education.


     (ii) The resources needed to pay for college.

 

     (iii) An affordable repayment plan for his or her student

 

debt.

 

     (iv) Quality customer service, reliable information, and fair

 

treatment, even if he or she struggles to repay his or her student

 

debt.

 

     (b) Receive, review, and attempt to resolve any complaints

 

from student loan borrowers, including, but not limited to,

 

attempting to resolve complaints in collaboration with institutions

 

of higher education, student loan servicers, the department, and

 

any other participants in student loan lending.

 

     (c) Compile and analyze data on student loan borrower

 

complaints as described in subdivision (b).

 

     (d) Assist student loan borrowers to understand their rights

 

and responsibilities under the terms of student education loans.

 

     (e) Provide information to the public, agencies, legislators,

 

and others regarding the problems and concerns of student loan

 

borrowers and make recommendations for resolving those problems and

 

concerns.

 

     (f) Analyze and monitor the development and implementation of

 

federal, state, and local laws, regulations, and policies relating

 

to student loan borrowers and recommend any changes he or she

 

considers necessary.

 

     (g) Review the complete student education loan history for any

 

student loan borrower who has provided written consent for that

 

review.

 

     (h) Disseminate information concerning the availability of the


ombudsman to assist student loan borrowers and potential student

 

loan borrowers and to assist any public institutions of higher

 

education, student loan servicers, or any other participants in

 

student education loan lending that have student loan servicing

 

concerns.

 

     (i) Take any other actions necessary to fulfill the duties of

 

the student loan ombudsman under this section.

 

     Sec. 7. Within 180 days after the effective date of this act,

 

the student loan ombudsman, in consultation with the director,

 

shall establish and maintain a student loan borrower education

 

program that includes educational presentations and materials

 

regarding student education loans. The program shall include

 

presentations and materials on key loan terms, documentation

 

requirements, monthly payment obligations, income-based repayment

 

options, loan forgiveness, disclosure requirements, and any other

 

subject matter selected by the student loan ombudsman.

 

     Sec. 9. Within 1 year after the effective date of this act,

 

the student loan ombudsman, and a representative of the department

 

of treasury designated by the state treasurer, shall conduct a

 

study and submit a joint report to the senate and house standing

 

committees with oversight over matters relating to banking and

 

higher education that includes their recommendations regarding

 

whether this state should return to providing state student loans

 

and loan guarantees, and what authority the student loan ombudsman

 

should have to refinance or modify those loans.

 

     Enacting section 1. This act takes effect 90 days after the

 

date it is enacted into law.


     Enacting section 2. This act does not take effect unless

 

Senate Bill No.____ or House Bill No. 6448 (request no. 06644'18) of

 

the 99th Legislature is enacted into law.