The Community Service Society (CSS), a 175-year-old anti-poverty organization located in New York City, today lauded the Assembly for proposing $1 million to implement the Student Loan Consumer Assistance Program (SLCAP) across New York State.
CSS President and CEO David R. Jones said: “Thanks to the leadership of Assembly Banks Committee Chair Ken Zebrowski (D-Rockland County), the Assembly has proposed $1 million to implement a Student Loan Consumer Assistance Program. I urge the Senate and Governor Cuomo to concur in the Assembly’s initiative, so that student loan borrowers across the state can get honest, unbiased advice on how to manage their debt.”
There are nearly 2.4 million New Yorkers with outstanding student loans, with a cumulative debt of more than $90 billion. The average New York State student borrower owes approximately $38,000, and borrowers in New York’s lowest-income communities have a loan default rate of 20 percent.
A recent U.S. Department of Education Inspector General report makes the need for SLCAP clear. The IG report examined the practices of the nine private companies authorized to service federal student loans and found that the Office of Federal Student Aid (FSA) had failed to exert oversight on the $1.5 trillion student loan serving sector, placing millions of borrowers at risk.
Under the Trump Administration, loan servicers are operating with impunity, often steering borrowers to decisions that make their debt worse, because the federal agency tasked with rooting out fraud and abuse is unwilling to protect the interests of borrowers.
SLCAP would be a statewide program featuring a toll-free “Help Line” operated by highly-trained staff and volunteers supervised by an attorney skilled in consumer protection law. In addition to the Help Line, the program would include a network of community-based organizations across the state capable of assisting borrowers with the toughest cases, including providing legal assistance when needed.