Empowering Students Through Enhanced Financial Counseling Act

Floor Speech

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Ms. JAYAPAL. Mr. Chairman, I rise in strong support of my amendment, which simply adds to the requirements for student loan exit counseling in the underlying bill.

I would like to thank Congressman Guthrie and Congresswoman Bonamici for their leadership in crafting this bill and for their consideration of this amendment.

With my amendment, exit counseling would include an explicit warning about third-party, fraudulent companies that often call, email, text, send letters, and use aggressive advertising to reach students during the repayment process.

These so-called debt relief companies sometimes say they can help settle your Federal student loans, warn borrowers that forgiveness programs could end soon, and sometimes even pose as being affiliated with the U.S. Government.

These companies generally do not offer any relief at all and charge for services that are already provided for free by loan servicers. Often, these companies leave borrowers worse off, severely damage their credit scores, or make changes to loan repayment plans that they didn't authorize.

I think Republicans and Democrats both agree that these are scams, pure and simple. These same companies who once preyed on underwater mortgage holders have now moved on to lure student loan borrowers simply trying to pay off their debts, provide for themselves or their families, and live a better life. It is hard enough for borrowers to navigate the complicated maze of repayment options and obtain sound guidance from their servicer without scammers coming in to blow up the whole thing.

What is more, many of these companies have already had to pay massive settlements to our government for scamming consumers. The Federal Trade Commission and State attorneys general across the country, including from my home State of Washington, have brought cases against these scammers who have used deception and false promises of relief to take more than $95 million in illegal upfront fees from American consumers over the years.

In 2014, the CFPB filed a lawsuit against a company called Student Loan Processing.US for deceiving consumers about its fee structure and misrepresenting its affiliation. It led to the distribution of hundreds of thousands of dollars back to defrauded consumers.

I am very grateful for the opportunity to offer this critical consumer protection amendment that helps empower students to make sound financial decisions. I do recognize that enhancing financial literacy is just a small sliver of the legislation we need to chip away at our student debt crisis.

Right now, I know that we need to take that next step in the crisis with bold policy solutions to address that $1.4 trillion in student loan debt that is dragging down our economy. But at this moment, Madam Chair, I commend my colleagues for this practical step, and I urge support of my amendment.

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Ms. JAYAPAL. Madam Chair, I yield 1\1/2\ minutes to the gentlewoman from Oregon (Ms. Bonamici).

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Ms. JAYAPAL. Madam Chair, I wanted to again reiterate my thanks to both Congressman Guthrie and Congresswoman Bonamici, and urge support of my amendment, and I yield back the balance of my time.

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