# Summary
The Student Loan Borrower Bill of Rights establishes comprehensive protections for borrowers of federal student loans, private education loans, and health profession loans. The bill requires student loan servicers to provide clearer disclosures about repayment options, veteran benefits, and servicemember protections, and mandates that borrowers receive information about alternative repayment plans before loans enter default. It restricts late fees to 4 percent of past-due payments and prohibits late fees for single missed payments, while also allowing borrowers to prepay loans without penalty and directing servicers to allocate extra payments according to borrower preferences or in ways that minimize interest costs.
The legislation strengthens borrower protections by requiring servicers to establish dedicated repayment specialist units for struggling borrowers and to contact borrowers proactively when they fall 30 days behind, offering alternatives to default. It prohibits servicers from marketing financial products using borrower data obtained through servicing and restricts the use of mandatory arbitration clauses and class action waivers in loan agreements. The bill also requires the removal of default information from credit reports once loans are fully repaid and creates requirements for private lenders to offer discharge protections in cases of borrower death or permanent disability.
Additional provisions establish a federal interagency working group to oversee loan servicing standards, create a centralized online portal for federal loan account access and payments, expand the Consumer Financial Protection Bureau's ombudsman office to handle all education loans, and require colleges to certify the amount of unmet financial need before private lenders can disburse funds. The bill directs federal agencies to issue detailed reports on private education loan markets and servicing practices within one to two years, with regulations becoming effective 180 days after enactment.
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