Nationally the student loan debt is $1.5 trillion and counting. In New Jersey it’s $43 billion.
Chuck Bell with Consumer Reports says 1 in 4 borrowers in the country is in default. He testified to the Assembly Higher Education Committee that the problem is largely due to lack of information or misinformation given to borrowers by student loan companies.
Thursday, the committee discussed a bill, which was first introduced in 2015 and pocket vetoed by former Gov. Chris Christie, that would give the state tools to go after bad actors.
Seth Frotman is the former student loan ombudsman at the Consumer Financial Protection Bureau. He says companies are cutting corners by rushing people off the phone or not training employees properly to save money.
“We saw, in my time there, 60,000 complaints around student loan companies and student loan servicers, includes thousands here in New Jersey,” he said. “Borrowers getting ripped off. They’re not getting the information they need.”
The Trump administration in March released its proposal to reform the Higher Education Act to address rising debt, but advocates say the state has to take the matter into their own hands because the federal government is not doing enough.
Six other states have passed similar student loan laws. The bill in New Jersey was released from committee Thursday. It’s already passed the Senate and now it will make its way to the Assembly floor.