Two state lawmakers from Tulsa will introduce a student loan borrower’s bill of rights next session.
Democratic Reps. Melissa Provenzano and John Waldron see Oklahoma’s $13.5 billion share of student loan debt as a problem, especially as average balances approach $30,000 and delinquencies and defaults rise year after year.
Karen Gray with ACTION Tulsa said many borrowers are facing tough choices when it comes to paying off those debts.
"So, 35% are failing to save for emergencies, 30% are failing to save for retirement, some people are even putting off having children. We think that this is also not great news for our economy," Gray said.
Jen Simms said when her husband went back to school to be a doctor, they took out loans to cover the cost of med school. But during his residency, they couldn’t afford they payments.
So, Simms says they deferred them, and the balances nearly doubled.
"We need doctors in this state, but the majority of the cost is on the students who will become those doctors, and I’m not sure if you asked him today if he would do it again if he would say yes," Simms said.
State funding of higher education is down from nearly 80% of the budget in the 1980s to less than 30% today, leaving students to pay a bigger share of their college bills. Gray said students paying more for their educations than ever are usually on their own to figure out loan options.
"Some loan servicing companies actively misrepresent options to borrowers to increase their profits. The options are complicated, scenarios are many and all can be very costly. And this is how we’ve come to believe student loans are really predatory loans," Gray said.
Provenzano and Waldron’s bill would at a minimum require loan servicers to give borrowers accurate information about things like interest and deferment periods.