The California Department of Financial Protection and Innovation (DFPI) works with state and federal agencies as well as local nonprofits to inform student borrowers of their rights and upcoming federal deadlines, including the public service loan waiver that expires on October 31. 2022.
With federal student loan repayment set to restart soon, the DFPI will host a free webinar titled “Get Help With Your Student Loans” on March 29 at 11 a.m. Student borrowers, who number nearly 4 million in the state, can register for the webinar here: https://us06web.zoom.us/webinar/register/WN_Xk09DudxTKibwloxb4aoaw.
The event is part of a series organized by the Department, with additional events coming in April in May, to help student borrowers feel empowered as they navigate a complex loan repayment system. The DFPI regulates student loan servicers and recently hired a student loan ombudsman to help triage complex issues for student borrowers. In January, Governor Gavin Newsom outlined his budget priorities and included a proposal that would allocate $10 million to the DFPI to fund a statewide communications campaign and grant program that would help student borrowers.
“Student borrowers in the United States are in crisis as a result of the COVID-19 pandemic,” said DFPI Commissioner Clothilde V. Hewlett. “To ensure the next generation of leaders have a chance to get their dreams back on track, we will do our part to educate and support them as we work hand-in-hand with community partners committed to their financial empowerment. ”
The webinar will highlight resources, workshops, assistance, and even free legal services available to student borrowers. Attendees will include representatives from the Consumer Financial Protection Bureau, Student Borrower Protection Center, East Bay Community Law Center, NextGen and others.
In California, 3.9 million student borrowers owe $147 billion in student debt, according to the Student Borrower Protection Center. It is believed that more than half a million student borrowers are delinquent or in default. According to the Institute for College Access and Success, the average student debt of bachelor’s degree holders nationwide increased about 56% from 2004 to 2019, from $18,550 to $28,950 after adjusting for of inflation.
A report by the California Student Loan and Debt Service Review Workgroup, which was created by the 2020 Budget Act, found that black and Latino residents have higher default and delinquency rates than other groups. A fair economic recovery depends on ensuring that student borrowers who have fallen behind have access to the tools and resources needed to get back on track.
Approximately 51,000 California student borrowers with federal student loans who work in the public service may be eligible for expanded access to the federal limited PSLF waiver program if they take specific action by October 31, 2022.
For more information and to keep up to date with upcoming events, please visit the DFPI Student Borrower Resource webpage. The DFPI has upcoming events in April and May. This and future webinars will be recorded and shared on the DFPI YouTube channel.
The DFPI licenses student loan servicers operating in California. Under this program, the Department accepts complaints from borrowers and enforces violations of the Student Loans Servicing Act, which was passed as AB 2251 and was drafted by Asm. Mark Stone in 2016. This law established state standards to ensure consistent, fair, and quality service for the millions of Californians who have student loans.
The Student Borrowers Bill of Rights, drafted as AB 376 (Asm. Stone) in 2020 and signed into law by Governor Newsom, provides some of the most extensive protections for student borrowers in the nation. The new law gives the DFPI the power to regulate expanded categories of student loan officers; establishes special protections for military borrowers, government borrowers, elderly borrowers, and borrowers with disabilities; and requires managers to act in the best financial interests of borrowers and help them navigate their repayment options.
In addition to student loan servicers, the DFPI licenses and regulates state-chartered banks and credit unions, commodity and investment advisers, money issuers, the offering and sale of securities and franchises, brokers, non-bank installment lenders, payday lenders, mortgage lenders and servicers, escrow companies, Property Assessed Clean Energy (PACE) program administrators, debt collectors, credit repair and consumer credit reporting, debt relief companies, some lease-to-own providers, etc.