On October 7, the Council of the District of Columbia enacted
B25-0037 or the New Student Loan Borrower Bill of Rights Amendment Act of 2024 (the “Act”), which amends the Department of Insurance and Securities Regulation Establishment Act of 1996 to address abusive practices related to student and private education loans. The Act mandates the creation of a revised Student Loan Borrower Bill of Rights by January 1, 2025, automatic issuance of limited servicing licenses to servicers under contract with the DOE, and the establishment of prohibited conduct for loan servicers and lenders.
The Act also sets forth responsibilities for servicers and lenders, including responsibilities regarding disability discharge and cosigner release. Furthermore, it prohibits conduct for student loan servicers and private education lenders, such as misrepresentation of loan terms, unfair or deceptive practices, and failure to report accurate payment histories to credit bureaus. It also assigns specific duties to servicers and lenders, such as handling disability discharge and cosigner release responsibly. To enforce these provisions, the act authorizes the Attorney General to bring actions against violators and provides for various remedies, including actual damages, restitution, punitive damages, and attorney’s fees.
Additionally, the Act mandates that private education lenders offer flexible or modified repayment options to all borrowers and provide information about such options on their websites. It also requires lenders to notify borrowers and cosigners about the release of obligations in cases of total and permanent disability and to ensure that cosigner release processes are transparent and accessible. Furthermore, the Act requires the development of updated consumer resources and imposes penalties for non-compliance.
