ConnPIRG Hails General Assembly’s Passage of First-in-the-Nation Student Loan Bill of Rights, Open Source Pilot Program

ConnPIRG

CONTACT:

Evan Preston, ConnPIRG State Director: [email protected] 217-370-1390 

ConnPIRG Hails General Assembly’s Passage of First-in-the-Nation Student Loan Bill of Rights, Open Source Pilot Program

In the last 36 hours of the legislative session, the General Assembly passed two pieces of legislation designed to make college more affordable. The Student Loan Bill of Rights will make Connecticut the first state in the nation to establish a student loan ombudsman to regulate student loan servicers and assist student borrowers and parents. The Open Source Textbook bill will establish a pilot program on the use of open-source textbooks, which can dramatically reduce the cost of course materials, at the University of Connecticut in collaboration with the Board of Regents of Higher Education.

“The cost of higher education is increasingly daunting to students and families and many pursuing a degree face abusive lending practices,” said ConnPIRG State Director Evan Preston. “By acting to protect student loan borrowers and encourage the adoption of high quality, affordable course materials, legislators responded to problems faced by many in Connecticut.”

The General Assembly’s action comes as the economic impact on families of the cost of higher education is larger than ever. Student loan debt is the second largest type of debt held by American households. The burden of student loan debt increased rapidly in recent years. From 2008 to 2012, the average debt level for graduating seniors who had student loans rose by 25 percent, from $23,450 to $29,400. Nationwide, Americans hold almost $1.2 trillion in student loan debt.

As borrowing increased, so too did the opportunities for abusive practices in the private student loan servicing industry. Loan servicers are the companies that many borrowers interact with directly, rather than the lending institutions themselves.The Consumer Financial Protection Bureau found several concerning aspects of this industry including obstacles blocking borrowers from paying off loans early, dividing payments from borrowers to maximize the late fees charged to borrowers, and opaque practices by servicers that can cause more fees to be assessed when a loan is transferred between servicers.

The price of college textbooks also skyrocketed in recent years. From 2003 and 2013, textbook prices increased 82 percent. The market for college textbooks is broken, dominated by a few companies. Open source textbooks are faculty-written, peer-reviewed textbooks that are published under an open license – meaning that they are available free online, they are free to download, and print copies are available for the cost of printing. The adoption of open source textbooks can save students as much as 90 percent of the cost of traditional texts.

“When families struggle to afford higher education and borrowers face abusive practices, the need for change is clear. ConnPIRG applauds the General Assembly for taking a positive step toward change this week,” said ConnPIRG’s Preston.