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A new position has been created with the Oregon Department of Consumer and Business Services to help people who have student loans and to make sure student loan servicers are in compliance.
The Oregon Legislature passed Senate Bill 485 in 2021 requiring all student loan servicers doing business in Oregon to obtain or renew a license. The bill also created the student loan ombuds position in the department’s Division of Financial Regulation (DFR).
The division hired Lane Thompson to kick off the program. She has a background as a housing counselor and saw how crippling student loan debt was for Oregonians trying to buy a home.
“People really have a tough time buying a home because they are buried in student loan debt,” Thompson said. “So, I really got to know the student loan side of it while working as a housing counselor.”
SB 485 gives the state the authority to keep student loan servicers in compliance. Thompson said there was a rash of class action lawsuits against federal and private student loan servicers and, as a result, many states created positions similar to this.
“The main issue was federal loan servicers were supposed to do certain things and they weren’t,” she said. “All federal loans are eligible for income driven repayment plans, meaning your payment is based on your income.”
But some federal servicers were pushing people to forbearance, which kicks their payments down the road while accruing interest.
Federal student loan servicers are private companies that have federal contracts. If they service loans for people who live in Oregon, SB 485 requires them to have a license in Oregon. This allows DFR to regulate student loan servicers in the same way the division regulates other financial services.
Thompson’s role as student loan ombuds is really a liaison, she said.
“I try to bring resolution of any conflict between the borrow and the servicer,” she said.
The ombuds is not a licensed student loan counselor, but is someone who accepts complaints and helps make sure servicers are in compliance.
Anyone who needs help with student loans is encouraged to go first to studentaid.gov, Thompson said. People still needing help can email email@example.com or call 888-877-4894 (toll-free).
Source: Department of Consumer and Business Services