WASHINGTON – Last week, Rep. Madeleine Dean (PA-04) introduced two pieces of legislation to fix aspects of the student loan system.
Private Loan Disability Discharge Act
“A constituent reached out for help in getting a loan discharged,” said Rep. Dean. “Her daughter had become totally disabled, and she was left with the remaining balance of her private student loans as the cosigner. The lending company said it was their policy to forgive the debt for the borrower, but not for the cosigner on the original agreement. That felt wrong - so we wrote a bill to correct the issue.”
Under current law, private loan lenders are not required to discharge student loans for borrowers or their cosigners if the borrower becomes totally and permanently disabled – unlike federal student loans which allow this discharge. The Private Loan Disability Discharge Act would require private student lenders to discharge the loan balance for both the borrower and co-signer if the borrower becomes totally and permanently disabled.
The legislation is endorsed by the National Consumer Law Center (on behalf of its low-income clients), Americans for Financial Reform, the Center for Responsible Lending, The National Council on Independent Living, and the U.S. International Council on Disabilities.
Ensuring Fair Legal Recourse for Private Student Loan Borrowers Act
“Currently, private loan borrowers are often required to waive their legal rights when signing loan agreements, either by agreeing in advance to arbitration, or by agreeing not to participate in a joint or class action lawsuit,” said Rep. Dean. “That’s not right. Students shouldn’t have to sign away basic legal protections in order to receive loans, especially given the practices of some actors in the student loan industry. This legislation will ensure that students can get the funding they need to claim their educations – without leaving themselves exposed.”
The Ensuring Fair Legal Recourse for Private Student Loan Borrowers Act amends the Truth in Lending Act to void the validity and enforceability of pre-dispute joint action agreements or pre-dispute joint-action waivers.
Protecting Students, Expanding Opportunity
These two bills expand on Rep. Dean’s work to make college more affordable and accessible. Her efforts also include partnering with Rep. Andy Levin (MI-09) to introduce the America’s College Promise Act of 2019 (H.R. 4212), which would provide two years of tuition-free access to community college programs that lead to a degree or industry-recognized credential. The program would also establish a grant program to provide pathways to success at minority-serving institutions.
Rep. Madeleine Dean is a mother, grandmother, attorney, professor, former four-term member of the Pennsylvania House of Representatives, and U.S. Representative for the Fourth District of Pennsylvania.
CONTACT: Matt Bieber, 202-251-5643