Advocates Urge New York State Legislators to Fund Student Loan Consumer Assistance Program
Dear Governor Cuomo, Speaker Heastie, Majority Leader Stewart-Cousins:
We write as organizations working to protect New York’s college students to urge your support for the inclusion of $1 million in the 2019-20 state budget to create the Student Loan Consumer Assistance Program (SLCAP).
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 Inspector General 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 servicing sector, placing millions of borrowers at risk.
Under the Trump Administration, loan servicers are thus 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.
That’s where SLCAP can help.
SLCAP would be a statewide program designed to provide borrowers with a toll-free help line operated by highly trained staff and volunteers, as well as a network of community-based organizations capable of assisting borrowers with the toughest cases including providing legal assistance when needed.
SLCAP would provide borrowers the help they need to address their student loan debt issues, free of charge.
The Assembly has proposed $1 million to fund the creation of the Student Loan Consumer Assistance Program. We ask the Senate and Governor Cuomo to support the Assembly initiative and help protect New York’s 2.4 million student loan borrowers from unscrupulous student loan servicer practices.
Sincerely,
Community Service Society
Consumer Reports
Empire Justice Center
Mobilization for Justice
New York Legal Assistance Group
New York Public Interest Research Group (NYPIRG)
Opportunities for a Better Tomorrow
SUNY Student Assembly
The Legal Aid Society
Western New York Law Center, Inc.
Young Invincibles