Relates to protections for private education loan borrowers and cosigners

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic10

Shown in neutral colors by design; Agora is non-partisan.

◆ The sponsor's argument

Why Rachel May says this is needed

Private education loan borrowers face mounting challenges as changes to federal student loan programs push more students into the private lend- ing market. Recent federal policy shifts limiting graduate student loan access mean more borrowers will rely on private loans with high interest rates, rigid repayment terms, and fewer consumer protections. Unlike federal loans, private education loans typically offer no income-driven repayment, no public service forgiveness, and limited forbearance options. When borrowers encounter financial hardship, they face aggressive collection practices without the protections available for other consumer debts. Cosigners bear particular risk. Many sign onto loans to help students attend college but find themselves trapped in obligations they cannot escape even after years of on-time payments. Widespread abuses are occurring in the private loan market. Courts have found that major servicers systematically block cosigner release despite advertising it to encourage cosigning, count payments incorrectly to disqualify borrowers from release, and offer forbearances without disclosing that accepting will restart the cosigner release clock. Debt collectors pursue loans without basic documentation, submit false affi- davits to courts, and file lawsuits disproportionately in majority-mi- nority communities. More than two million New Yorkers carry student debt. As federal programs contract, private lenders will capture a larger share of the market. Without state intervention, predatory practices will intensify. Borrowers need protections now. This legislation addresses the core problems in the private loan market. It creates transparency requirements so borrowers and cosigners under- stand their rights. It establishes clear timelines and standards for cosigner release. It prohibits abusive acceleration and term changes. It requires debt collectors to possess proper documentation before filing suit. It provides enforcement tools to hold bad actors accountable. The need for these protections will only grow as more students turn to private loans to finance their education.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.