New protections for New Yorkers with student debt and what it means for you
New York is the third-largest state where student debt borrowers account for more than $90.6 billion of the total student debt owed across the country––just after California and Texas.
Many of these borrowers have reported experiencing shoddy customer service from their student loan servicing company. In some cases, the customer service wasn’t just bad—it was illegal.
At Summer, we care about student loan borrowers’ rights, and fixing the student loan system more holistically. As such, we met with New York’s leading financial regulator and consumer protection agency, the Department of Financial Services, to learn more about how we can support borrowers experiencing predatory, illegal services.
Earlier this year, the Department of Financial Services established new regulations for student loan companies to comply with—providing greater legal protection for borrowers across New York state.
To help you understand how this may impact you as a borrower, the Department published a “Bill of Rights” as a plain-language explanation of these new protections.
New York’s Borrower Bill of Rights
If you’re a student loan borrower in the state of New York, the new Bill of Rights means you now have the legal right to:
- Detailed financial aid award letters from schools in New York.
- Clear, accurate, and complete information about your loan terms.
- Information about any available loan repayment plans and options.
- Information about any available discharge, forgiveness, and cancellation options.
- Loan payments applied to your account in ways that most benefit you.
- Knowledgeable customer service representatives who treat you respectfully and fairly.
- Detailed loan account histories that are easily and securely accessible online.
- Seamless transfers if your loan is serviced by a new company.
- Accurate payment history reporting to credit agencies.
- Responses to complaints you make to your servicer.
Note: A full explanation of each right is available on their website.
What do these rights mean for you?
Over at Summer, we’re thrilled to see the government standing up for borrowers, and these protections are a major step forward to ensure better outcomes for all.
Here are some of our favorite examples of what these rights mean for you:
- Right #5 means that your loan servicer now must apply any over-payment you make (i.e. when you pay more than your minimum monthly payment) towards the highest interest rate loan, which maximizes your savings.
- Right #8 means that your loan servicer is now required to do an array of helpful things if they transfer your loan to another servicing company, such as ensuring that all relevant documents are properly transferred, including copies of the loan’s promissory note, a schedule of payments that have been made, and any records of communication with you.
- Right #9 requires your loan servicer to report only accurate information on your payment performance to credit reporting agencies.
Think your rights might have been violated?
If you think that your student loan servicer might have violated one of the rights listed above, we encourage you to file a complaint with the agency at www.dfs.ny.gov/complaint.
Summer is always fighting to improve the financial health of student loan borrowers. Sign up to try Summer today at meetsummer.org.
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Summer is a social enterprise helping student loan borrowers navigate the complex repayment process. Founded in partnership with Yale University, Summer partners with colleges, employers, and trade associations to provide borrowers with an innovative app to track their loans in one place and enroll them in the best repayment plan.
