McAuliffe to seek student loan protections, expanded access

This Article was originally published in the Richmond Times-Dispatch

The governor proposed legislative initiatives Wednesday to expand access to student financial aid and college credit while taking steps to minimize predatory lending practices that leave some graduates mired in debt.

The series of education and workforce bills would regulate student loan servicers through a state licensure requirement and establish a state ombudsman’s office to give students guidance on their rights and responsibilities as borrowers.

The bills also would require community colleges to establish ways to award academic credit for apprenticeships related to instruction and allow foster-care youths pursuing workforce credentials to obtain grants through a program that is now limited to academic studies.

The education and workforce proposals were announced by Gov. Terry McAuliffe at Virginia Tech and Lt. Gov. Ralph S. Northam at the state Capitol, where a 2016 graduate of Virginia State University told of the constraints he faces in pursuing a career after amassing $40,000 in student loans.

“Once you have student debt, it’s hard to avoid drowning in it,” said Adolph Brown IV, an economics major.

The debt Brown faces is “the story of many young scholars,” Northam said. At Eastern Virginia Medical School where he teaches, the average debt is $166,000, which “almost forces the hand” of what specialties new doctors must enter to pay off their loans.

Virginia borrowers collectively owe more than $30 billion in student loans, he said, “but lack basic consumer protections against predatory loan servicers.”

The legislative package would establish a borrower’s bill of rights and the state ombudsman’s office to help students navigate the lending process and receive clear answers, he said.

Student loan providers doing business in Virginia would be required to be licensed by the State Corporation Commission’s Bureau of Financial Institutions, which “essentially every other financial institution” must do, Northam said.The legislative package also would restructure the financial aid system, which he said currently does not encourage students to graduate on time to lower their debt.

Universities would be allowed to use financial aid awards to incentivize students to graduate in four years. The universities would have the option to award larger amounts to students as they progress toward a degree.

To expand access to nontraditional students, such as single parents and adult learners, the legislation also would remove the requirement that grant recipients be dependents of parents or a custodian in order to qualify for aid.

Also in the package is a plan to expand access to virtual education by requiring each school division to provide a free, full-time virtual learning option to students in grades K-12. The virtual programs would be regionally based and “equitable across the state,” Northam said.

To encourage students and young adults to pursue business ventures, another piece of the package would allow entrepreneurs younger than 25 to register their email, instead of a physical address, with the SCC.

Glenn DuBois, chancellor of the Virginia Community College System, spoke to the need to expand opportunities for foster-care youths, describing as “a national tragedy” the small percentage who are able to obtain a college degree.

Nor has much financial aid been available for short-term training to obtain certification in fields with high-demand jobs, he said. The proposal expands eligibility for the VCCS foster-care tuition grant program by opening it to students pursuing noncredit workforce credentials.

DuBois also backed the proposal to grant college credit for “private learning” as a way to expand access to nontraditional students.He said the VCCS will “map out pathways from apprenticeship into appropriate degree programs, without that apprenticeship graduate starting from scratch.”

kkapsidelis@timesdispatch.com

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