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.