Mass Attorney General Announces New Student Loan Ombudsman; Resources For Borrowers

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In full transparency, the following is a press release form the Massachusetts Attorney General’s office submitted to SOURCE media.

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BOSTON – Massachusetts Attorney General Maura Healey today, July 1, announced the appointment of a new Student Loan Ombudsman, building off of her office’s nation-leading work on the frontlines of the student debt crisis and providing more resources for struggling borrowers to get the help they need.

The Ombudsman – established by the state’s economic development legislation that was signed into law in January and codifies the “Student Loan Borrower Bill of Rights” – will be responsible for resolving student complaints, educating borrowers, monitoring student loan servicers, and submitting annual reports on borrower complaints and trends. 

This new position will compliment and strengthen the work of AG Healey’s Student Loan Assistance Unit, which was created in 2015 to help borrowers with their loans, explore repayment options, prevent wage garnishments and tax refund interceptions, secure debt relief, and identify “debt relief” scams, among other actions.

“My office is on the frontlines of this $1.7 trillion crisis, fighting on behalf of student borrowers in Massachusetts, and taking on a student loan system that is fundamentally broken and devastating to countless Americans,” AG Healey said. “The establishment of this Ombudsman position will be critical in our ongoing work to help students and families invest in their future and get the relief they deserve. I want to thank Senator Lesser and Representative Higgins for their bold leadership in getting these borrower protections in place and look forward to their partnership, along with the student loan advocacy community, in promoting these resources.”

The “Student Loan Borrower Bill of Rights,” sponsored by State Senator Eric Lesser and Representative Natalie Higgins, also gives the Division of Banks new regulatory authority and requires certain types of servicers to obtain licenses from the Division.

“Earlier this year, we celebrated a big moment when the Student Loan Borrower Bill of Rights became law. Its passage was a result of over six years of advocacy and determination by supporters across the Commonwealth who made calls, spoke up, and cheered Rep. Higgins and I on to push this across the finish line,” said Senator Eric P. Lesser, Senate Chair of the Joint Committee on Economic Development and Emerging Technologies. “Nearly a million people within Massachusetts collectively owe over $40 billion in student loans, and until now have not benefited from adequate state-level consumer protections on one of the biggest financial investments in their lives. I am looking forward to working with Attorney General Healey and the Student Loan Ombudsman’s office in implementing a strong support system to protect student loan borrowers across Massachusetts from these harmful practices.”

“After more than six years of advocacy, I am thankful that Massachusetts will have a Student Loan Ombudsman in the Attorney General’s Office,” said Representative Natalie M. Higgins, House Vice Chair of the Joint Committee on Public Service. “The COVID-19 student loan relief measures are scheduled to end September 30, and with more than one million student loan borrowers in Massachusetts, it is vital they understand their rights and can turn to the Ombudsman’s office for support if they face challenges with their repayment plans.”

“With a regulatory framework in place to ensure servicers are in compliance with the rules, and student borrowers are protected, the Division of Banks is fully prepared to begin accepting and processing license applications from student loan servicers doing business in the Commonwealth,” said Division of Banks Commissioner Mary L. Gallagher. “The Division is looking forward to working collaboratively with the Student Loan Ombudsman in furtherance of consumer protections.”

Serving as the state’s new Student Loan Ombudsman is Arwen Thoman, Deputy Director of AG Healey’s Insurance and Financial Services Division (IFSD). Erica Harmon, IFSD’s Program Analyst, will serve as Deputy Student Loan Ombudsman. Both Thoman and Harmon have extensive experience helping student loan borrowers through their management of the AG’s Student Loan Assistance Unit.

As part of the new Ombudsman’s role, the AG’s Student Loan Assistance Unit will also promote borrower educational materials and inform public employees about the federal Public Service Loan Forgiveness Program (PSLF) and Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF).

In February, AG Healey secured first-of-its-kind relief in a settlement with the Pennsylvania Higher Education Assistance Agency (PHEAA), d/b/a FedLoan Servicing, following a lawsuit alleging that the servicer made errors and provided misinformation to borrowers about PSLF eligibility requirements, causing borrowers to lose months of qualifying payments towards loan forgiveness. The settlement provides an opportunity for tens of thousands of Massachusetts borrowers, including public servants and teachers, whose federal loans are serviced by PHEAA to submit a claim and secure a detailed account review.

In addition, the Student Loan Ombudsman will create opportunities for collaboration with the growing number of state-level student loan ombudspersons, serve as a platform for advocating for regulatory reforms and policy changes with the Biden Administration and with loan servicers, and will help amplify the voices of student loan borrowers. 

Since its creation in 2015, the AG’s Student Loan Assistance Unit has taken many actions to help student loan borrowers relating to income-driven repayment enrollment, default resolution, disability discharge, borrower defense, school closure, policy advocacy, and settlement implementations. Each year, the unit typically receives nearly 1,000 written help requests and over 2,000 hotline calls and generates savings and refunds of $1.5 million for borrowers. 

To assist the work of the Ombudsman, a new Student Loan Help Request form has been made available online to better assist borrowers with their needs and loan issues. Massachusetts students who are looking for help or information can also call the AG’s Student Loan Assistance Helpline at 1-888-830-6277.

editor

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