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Tuesday, June 22, 2021

Three Bills To Reduce Student Loan Debt Unveiled In Olympia

Washington Attorney General Bob Ferguson
Washington Attorney General Bob Ferguson

OLYMPIA — A trio of bill unveiled Tuesday by Sen. Marko Liis (D-Lynnwood) and Attorney General Bob Ferguson could provide relief to college students from the crushing burden of  student loan debt.

“Spiraling student loan debt is strangling middle class households and those who aspire to middle-class households,” Liias said. “This affects not only students currently taking out loans but also working adults who are still paying off huge debt as well as future students who face the same pitfalls.”

Liias’ first bill, the Washington Student Loan Bill of Rights (SB 6610), would help students avoid spiraling debt by cracking down on fraud, misrepresentation, inaccuracies and other actions by student loan servicers. SB 6610 would create the position of student loan ombudsman, require loan servicers operating in the state to first gain approval from the Department of Financial Institutions (DFI), and grant DFI the authority and provide the Attorney General’s Office the additional tools to conduct investigations and examinations of loan servicers.

“My office is cracking down on student-loan scammers, from unscrupulous for-profit schools to predatory loan adjustment companies,” said Ferguson.  “I thank Sen. Liias for proposing a bill that would grant my office additional tools to attack fraud and aid students and graduates.”

The second bill, the Employer Loan Repayment Tax Credit (SB 6608), would give employers a B&O tax credit for helping employees repay student loans. The credit provided by the bill would equal 25 percent of the amount repaid directly to a student loan lender toward principal and interest, with a maximum credit per employee of $1,000 for an associate’s degree, $4,000 for a bachelor’s degree, and $6,000 for a graduate or postgraduate degree.

Anna Nepomuceno, a UW Tacoma student who spoke at the rollout in support of the legislation, told of how her husband’s $100,000 in student loan debt prevents them from being able to purchase a house or car or even qualify for a cell phone purchase.

The third bill, SB 6609, would increase access to college for undergraduate and graduate students by exploring lower cost loan options by the state such as student loans competitive with federal interest through the use of tax-exempt bonds, which were approved for use by the federal government late last year.

“We have a society that tells us we can accomplish anything we want,” said Nick DeMuro, a UW student who also spoke and questioned whether the toll from his growing student loans would prevent him from finishing his education and becoming a professor. “Then we face the hard reality that this isn’t true.”

“These bills compliment efforts in the House to bring relief to thousands of Washingtonians struggling with student loan debt,” said Rep. Tina Orwall (D-Des Moines).

“Democrats in both the House and Senate see student loan debt as a crisis that demands action,” Liias added. “It is our hope that our colleagues across the aisle will recognize this need with the same urgency that we do.”

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