Washington State House Democrats


Student loan reforms pass House budget committee

OLYMPIA—Student loans are now essential for most blue collar and middle-class students trying to earn a college degree. Two ideas to help students get fair deals on those student loans passed the budget-writing committee in the House of Representatives last Friday.

“Both of these bills have the same goal: giving every college student a fair deal. If students receive help understanding their loans, it can help prevent them from getting into financial trouble,” said Rep. Tina Orwall (D-Des Moines), Speaker Pro Tempore of the House and the author of the SOAR Act (House Bill 1169).

The SOAR Act:

  • Establishes a 1-800 student debt information line with debt-counseling program.
  • Prohibits state licensing agencies from suspending a person’s professional license for falling behind on a student loan.
  • Reduces how much financial institutions can garnish from someone’s wages for being delinquent on student loans to align with the established federal levels.
  • Puts limits on the interest rate on judgments for student loan defaults.
  • Requires colleges and financial institutions to help people locate these free counseling services on a website or a hotline.

The second measure to pass the House Appropriations Committee, House Bill 1440 by Rep. Monica Stonier (D-Vancouver), is also aimed at strengthening consumer protections for students who take out student loans, and cracking down on the abusive collection practices some student loan servicing companies have exhibited.

“Thirty years ago, you could work a summer job and might save up enough money for college tuition,” Stonier said. “Today, you could work full-time, year-round, and still struggle to pay for tuition and living expenses. So student loans today are essential for blue collar and middle-class families to send their sons and daughters to college. This legislation gives those students essential protections as consumers so they can keep those dreams of getting their college degree.”

Stonier’s legislation requires student loan services to be licensed, gathers data and information about student loans in Washington state and establishes a student loan ombudsman to help handle questions and complaints about unfair practices. 

It prohibits the loan servicers from misleading people with student loans or encouraging them to act against their own interests, providing inaccurate information to credit bureaus, failing to credit payments consistent with the borrower’s intent and other unfair practices. 

Finally, the legislation also charges student loan servicing companies a fee to cover the cost of the ombudsman addressing complaints lodged by borrowers.

The next step for both measures is a vote by the full House of Representatives.