Washington Student Debt Letter Legislation

Washington Legislation Recap

Washington passed student debt letter legislation in April 2017, requiring all higher education institutions, including degree-granting institutions, private vocational schools, community colleges, state technical colleges and state apprenticeship and training programs in the state to notify students who have applied for student financial aid about their existing student loan indebtedness. In March 2018, Washington passed legislation establishing a Student Loan Bill of Rights. Among many directives the legislation established the role of student loan advocate. The key responsibility of the advocate is to provide assistance to any student education loan borrower regarding their student education loan(s). This legislation also updated the reporting requirements of the original student debt letter legislation.

Who must receive student indebtedness correspondence and when?

Beginning on July 1, 2018, Washington legislation requires schools to provide a notification with information about the student education loans that the educational institution has certified, in addition to other information:

• To each enrolled student who has applied for financial aid; and,
• Each time a financial aid package that includes a new or revised student education loan is offered to the student.

What information must schools report in order to meet the requirements of the law?

The notification must be sent by email. In addition, the institution may also provide another copy of the notification in writing, in an electronic format or in person. The notification must include the following estimates based on information available at the time of the notification:

1. The total amount of student education loans taken out by the student that were certified by the educational institution, (i.e. federal, state, institutional and private alternative loans).
2. The potential total payoff amount of the student education loans, including principal |and interest, or a range of the total payoff.
3. The monthly repayment amount for the student’s student educational loans, including principal and interest, based on the federal loan repayment plan borrowers are automatically enrolled in if they do not select an alternative repayment plan.
4. The percentage of the aggregate federal direct loan borrowing limit, applicable to the student’s program of study, that student has reached at the time the information is sent to the student. This calculation requires consideration of all federal direct education loans received and not limited to what a student received at the current school.

Are there any additional requirements or statements?

Yes, schools must include:

• Consumer information about the difference between private student loans and federal student loans, including a brief overview of the availability of the income-driven repayment plans and loan forgiveness programs for federal loans.
• A statement that the estimates and ranges provided are general in nature, and not meant as a guarantee or promise of the actual projected amount.
• A statement that a variety of repayment plans are available for federal student loans that may limit the monthly repayment amount based on income.
• A statement that income-driven repayment plans may allow a federal student loan borrower to reduce their monthly payment according to a percentage of their income, and a brief summary of the potentially applicable plans.
• Information about how to access resources for student education loan borrowers provided by federal or state agencies, such as a student education loan debt hotline and website or student loan advocate, federal student loan repayment calculator, complaint portals, or other available resources. This information must include contact information for the student loan advocate.

Here's how to navigate it

Student debt letters are a great way to help you retain the students you've worked so hard to enroll. But for an already overworked staff, debt letter legislation can feel like just one more area requiring compliance. Our free downloadable resources can help you find your way!