Governor Dannel P. Malloy today joined groups of advocates and state officials at a bill signing ceremony to commemorate two new pieces of legislation that aim to tackle rising student loan debt and college affordability. The first – Public Act 15-200 – was introduced by Governor Malloy, allowing students to refinance their loans at substantially lower rates and delivering lower monthly payments. The second – Public Act 15-162 – gives the Connecticut Department of Banking more regulatory oversight over student loans to help ensure fairness in the process.
“We have one of the most educated workforces in America – and we need to keep it that way. As we deliver record high graduation rates in our high schools, we need to ensure that residents have access to affordable higher education. It’s central to growing our middle class. College should not – and cannot – be out of reach for Americans,” Governor Malloy said. “Student loans and the high student debt carried by the average American threatens to be the next major debt crisis in the United States. We are taking action to fight that trend.”
Connecticut Department of Banking Commissioner Jorge Perez said, “I thank Governor Malloy and the co-chairs of the legislature’s Banking Committee for their continued and strong investment in Connecticut students – an investment that will pay meaningful dividends in the lives of so many. Helping students keep their focus on learning is what this legislation is all about.”
“With the signing of this bill, managing the costs of attending college just got a bit easier. CHESLA now is able to offer students the ability to refinance their loans and just announced new loans at a record-low rate of 4.95 percent, made possible by last year’s combination of the Connecticut Student Loan Foundation with CHESLA. These two organizations share a mission of ensuring access to higher education, and as the foundation’s past board chair, I believed it made perfect sense to use the foundation’s available assets to benefit our Connecticut college students,” State Treasurer Denise L. Nappier said. “September is College Savings Month, a good time to recognize that the strength of Connecticut’s economy depends on a well-educated and financially literate workforce. As a state, we must do our part to pave the path for success of the next generation as they gear up to compete in a global economy.”
“I am so proud that Connecticut is leading the way for college affordability by becoming the first state in the nation to create a Student Loan Bill of Rights,” House Majority Leader Joe Aresimowicz (D-Berlin, Southington) said. “Sixty-four percent of college graduates in our state have student loan debt, which is why it is so important that we continue to take measures to make college more affordable for students and their families.”
“This is truly groundbreaking legislation. The shackles of student debt prevent graduates from starting businesses, buying homes, even starting families. I am grateful to Governor Malloy for his support and proud that Connecticut is leading the nation-the first state to pass a Student Loan Bill of Rights,” State Representative Matt Lesser (D-Middletown), co-chair of the General Assembly’s Banking Committee, said.
Public Act 15-200 – An Act Concerning the Duties and Authority of the Connecticut Higher Education Supplemental Loan Authority
- Introduced by Governor Malloy, this new law will allow thousands of borrowers and holders of student debt around Connecticut, including those with loans from the Connecticut Higher Education Student Loan Authority (CHESLA) and other loans, to refinance their student loans at a significantly lower interest rate, effectively cutting their monthly payments and reducing the burden.
- This expanded ability to refinance applies to:
- Individuals who hold outstanding loans issued by CHESLA
- Students attending higher education institutions in Connecticut or who currently reside in Connecticut
- Parents who are paying loans on behalf of a student attending a higher education institution in Connecticut or who currently reside in Connecticut
- This refinancing is made possible by allowing CHESLA to issue bonds each year with the proceeds of that sale going to the refinancing.
Public Act 15-162 – An Act Concerning a Student Loan Bill of Rights
- This law will allow the Connecticut Department of Banking to exercise additional oversight and regulatory authority over every aspect of the student loan process by requiring the licensing of student loan servicers
- Student loan servicers are intimately involved in the administrative actions surrounding student loans, including the repayment process. Oversight of businesses and individuals who provide these services to lenders will further protect Connecticut citizens from unfair lending and collection practices.