Sometimes something so irrational happens in Richmond that I am reduced to anger. So let me vent a bit.
One of the biggest problems facing Virginians is student loan debt. Currently over a million of our neighbors owe more than thirty billion dollars on student loans. And the numbers are increasing. The debt limits their access to home mortgages, business opportunities, and often leads to default and bankruptcy.
In Virginia the student loan servicers are mostly unregulated. The federal Consumer Financial Protection Bureau regulates them, but only the largest servicers are examined. Smaller servicers are not reviewed, yet they account for about 80% of those operating in 2016. And the smaller groups account for about one-third of the complaints that Virginia borrowers filed with federal regulators.
I believe we need to close that gap, so I introduced the Student Borrowers' Bill of Rights. This bill was the result of a study I asked for a year ago by the State Council of Higher Education in Virginia, the State Treasury Department and The Virginia 529 Program. The main components were requirements that student loan servicers be licensed and that the state hire an ombudsman to guide borrowers and protect their rights. We quickly lost the ombudsman component because House members opposed any new programs. We focused on basic licensing requirements to prevent the most egregious practices by some companies.
The licensing part passed the Senate with a large bipartisan majority -- 36 to 4. The Administration, which supported the bill, spent hours with House members perfecting and explaining the bill. The State Corporation Commission, which would have implemented the program, made suggestions and all were accepted. Then it arrived in the House Commerce and Labor Committee.
Without explanation or suggested amendments, the Committee Republicans defeated the Student Borrower's Bill of Rights on a party line vote. It is dead for another year.
I am really angry -- Virginia's student borrowers deserve better. Next year I plan to introduce the bill again. And I will ask a House Republican to introduce it on the House side. Petty partisan politics is the only explanation for failure to help student borrowers now. Unfortunately, students' economic interests have been thwarted by petty partisan interests.
